Professional Documents
Culture Documents
HEARING
BEFORE THE
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Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records
of the Committee on Veterans Affairs are also published in electronic form. The printed
hearing record remains the official version. Because electronic submissions are used to
prepare both printed and electronic versions of the hearing record, the process of converting
between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process
is further refined.
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CONTENTS
March 27, 2012
Page
From The Ground Up: Assessing Ongoing Delays In VA Major Construction ...
OPENING STATEMENTS
Chairman Jeff Miller ...............................................................................................
Prepared Statement of Chairman Miller ........................................................
Hon. Bob Filner Prepared Statement only ............................................................
Hon. Corrine Brown Prepared Statement only .....................................................
Hon. Silvestre Reyes ................................................................................................
Prepared Statement of Hon. Reyes .................................................................
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54
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WITNESSES
Miller Gorrie, Chairman of the Board, Brasfield & Gorrie General Contractors ........................................................................................................................
Prepared Statement of Mr. Gorrie ..................................................................
Accompanied by:
Tim Dwyer, President, South Region, Brasfield & Gorrie General Contractors
John P. OKeefe, President, National Group, Clark Construction Group LLC ..
Prepared Statement of Mr. OKeefe ................................................................
Hon. Robert A Petzel, M.D., Under Secretary for Health, Veterans Health
Administration, U.S. Department of Veterans Affairs ......................................
Prepared Statement of Hon. Petzel .................................................................
Glenn D. Haggstrom, Executive Director, Office of Acquisitions, Logistics,
and Construction, U.S. Department of Veterans Affairs
Accompanied by:
Robert L. Neary, Jr., Acting Executive Director, Office of Construction
& Facilities Management, U.S. Department of Veterans Affairs
Bart Bruchok, Resident Engineer, Office of Construction and Facilities
Management, U.S. Department of Veterans Affairs
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iii
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However, only five of those facilities are now open. Thirty-eight
are behind schedule with 14 of these falling three or more years
behind their intended opening date.
As the VA health care system has grown, it appears that we
have come to a point in VAs major construction program where the
administrative structure is an obstacle that is not effectively supporting the mission.
As a result, our veterans are the ones who are left without services and our taxpayers are the ones who are left holding the check
or writing a new one.
A case in point. On October 24th, 2008, VA broke ground to build
a new medical center in Orlando with a scheduled completion date
of October 12th of 2012. Yet, this past December, I learned of serious and significant issues surrounding the construction of this new
facility to better care for the veterans in that region.
It was not the VA, but the contractor who came forward and they
came forward out of sheer frustration. When VA confirmed a few
days later that the project was indeed going to be delayed, I quickly scheduled a visit to Orlando to see the situation myself.
Needless to say, what I saw was startling and unacceptable.
There is a disconnect between VA central office and what they
were telling me about the extent of the delay and the day-to-day
reality on the ground.
Clearly there are problems with design, problems with procurement of specific medical equipment, change orders and how they all
fit together. Look, the issue of pointing fingers has got to stop.
We cannot and we must not allow the problems in Orlando to
exist there or anywhere else. It is vital that reputable, long-standing companies want to work with the VA on significant projects
such as these. They are flagship projects and they are important
to the delivery of care to our veterans.
Todays plans and projects are tomorrows hospitals and clinics.
And whether it is by building the new, renovating the old, or leasing the existing, our allegiance must always be to the veteran, who
relies on the VA to provide the benefits and services they need to
lead healthy, productive lives.
Again, I want to thank everybody for joining us here today.
I now yield to the Ranking Member, Mr. Reyes, for any opening
comments he may have.
[THE PREPARED STATEMENT OF CHAIRMAN MILLER APPEARS IN THE
APPENDIX]
OPENING STATEMENT OF HON. SILVESTRE REYES,
DEMOCRATIC MEMBER
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that are important to every single person on this Committee and
most importantly to our veterans.
At issue today is an all-too-familiar theme of these oversight
hearings, lack of management, lack of control, lack of accountability, and very much needed oversight.
I would say that most of the problems that have been encountered during the construction of the facilities we are looking at
today could have been avoided with proper management and vigilant project oversight.
Let me just take Denver as an example, a facility that has received appropriated funds as far back as fiscal year 2004. As of November 2011, VA announced that the target completion date for
this hospital is 2015, 11 years after first receiving funds and an increase of at least 29 percent to the cost. And to date, it is not even
built yet.
Denver is not alone. The Las Vegas facility has increased in cost
from the original estimate by at least 110 percent, Orlando 89 percent, and New Orleans 45 percent. These increases represent over
a billion dollars in funding. That is just the increases.
Too often we hear of cost increases such as those that I have just
mentioned, delayed or suspended construction activities, inadequate design plans, and very little communication between VA
and its partners, communication that I understand would have
helped to clear up some of the misunderstandings at certain construction sites such as Orlando.
It is hard for me to believe that VA would refuse to meet with
contracting officials concerning any construction project much less
one that is behind schedule and beset with problems, yet that is
what I am being told today.
VAs testimony points to the fact that it has been 18 years since
they have built a medical center. That may be true, but it does not
excuse poor management and basic oversight responsibilities.
I would like to hear more details from Dr. Petzel on the integration of risk management into the core project of management functions.
I believe this is one of two recommendations from the Government Accountability Offices December 2009 report on project cost
estimates.
I am sure that everyone would agree that we have to do better
than this. We expect better than this. Veterans deserve better than
this. And I hope that todays hearing will help shed light on the
barriers and challenges that VA faces during the construction process of these projects.
As we move forward, I look forward to working with VA on improving the construction program and ensuring more transparency
and efficiency in the process.
Again, I thank you, Mr. Chairman, for calling this hearing.
[THE PREPARED STATEMENT OF HON. REYES APPEARS IN THE APPENDIX]
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4
Mr. Gorrie is accompanied by Mr. Tim Dwyer, President of the
south region for Brasfield & Gorrie. We are also joined by Mr. John
OKeefe, National Group President for Clark Construction Group,
LLC.
Thank you for being with us today and being willing to share
your insight.
And I think it is important to note that of the six firms that we
invited to participate in todays hearing, Brasfield & Gorrie and
Clark were the only ones willing to speak on the record regarding
their experience contracting with VA.
I understand that VA is your customer and I appreciate you
being here today.
Gentlemen, your past will be somebody elses future. I appreciate
you speaking with us this morning.
Mr. Gorrie, you are recognized to proceed. Thank you for being
here.
STATEMENTS OF MILLER GORRIE, CHAIRMAN OF THE BOARD,
BRASFIELD & GORRIE, ACCOMPANIED BY: TIM DWYER,
PRESIDENT, SOUTH REGION, BRASFIELD & GORRIE; JOHN P.
OKEEFE, PRESIDENT, NATIONAL GROUP, CLARK CONSTRUCTION GROUP, LLC
STATEMENT OF MILLER GORRIE
Mr. GORRIE. Thank you, Mr. Chairman and ladies and gentlemen.
I am Miller Gorrie. I am the Chairman of Brasfield & Gorrie, a
general contractor that I founded in 1964.
Last year, we were ranked number two in the Nation in terms
of health care revenues, hospital work completed. And in the last
15 years, we have been ranked no lower than third and six of those
15 years, we were ranked number one in health care construction.
So we do have some experience in health care construction.
We are the contractor on the Orlando hospital. Not long after we
were awarded the job, we began to realize that we did not have
adequate information to complete the job. In other words, we did
not have enough information to build the job and we began asking
for information.
We were restricted during the bid process from asking for this
information. For the final 12 weeks, we were shut down from asking questions.
But after we got the job, we had to ask questions in order to
build the job and we learned that the medical equipment lists that
were included in the documents had been discarded by the VA and
that the medical center had been allowed the opportunity to select
equipment on their own.
We were obligated by our contract to coordinate this medical
equipment, so when the medical list began to change, we did not
have any way to coordinate it. And more importantly, the designers, the architects and engineers who were supposed to design the
hospital around medical equipment, which is customary to do, you
have to know what your equipment is and design the hospital
around it, they could not do it because equipment had not been selected and it was changing.
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So we got behind the eight ball to start with. We got behind because the equipment had not been selected and the details were
not there.
So we began construction and we got the structure up pretty
well. And then we got into the fit-out portion which is the interior
of the hospital and we again run into problems because we did not
have the information.
We could not do the fit-out and finish work, so we had about a
thousand man crew and we had to cut it back because could not
work efficiently. So we cut it back to about 500 and that was frustrating that we had to do that.
So we have been on the job now for 18 months and we have been
impacted since the beginning withspent 18 months and we have
not had complete drawings to work with.
During 12 of those 18 months, the hospital in certain portions of
it have been suspended where we could not work to allow for completion of the documents. So now we are trying to figure out what
to do. So we go to the contracting officer and ask for help.
In May, we come up here and meet with the contracting officer
and were told basically to continue the course, that they did not
give us any additional information and said that things will be
worked out, but we did not get any information.
We waited a few more months and then November, we asked for
another meeting. We had a meeting on the job site and same thing.
We did not get much help. We did not get any information.
So now we are a year into the job and we have no completed design. We are trying to build a hospital. We have inadequate information. We are being held up.
So, I mean, it is our job. I mean, under the terms of our contract,
we had a lump sum, fixed price contract. We were supposed to be
given drawings up front to build by. That was the nature of a lump
sum, fixed price contract. We did not have that. We did not get
that. We were supposed to, but we did not.
So we are trying to work and we are running into obstacles everywhere we turn.
In January, the VA told the designers to finish the drawings and
they put on a blitz to finish the drawings. And last week, in March,
we got 200 drawings which is supposedly the final set of drawings.
We now have been issuedwe originally had a set of 4,500 drawings. Now we have gotwe have been issued over 10,000 drawings,
about 1,000 drawings, new drawings since the early part of the
year.
And now we are being told to go to work and catch up, so to
speak, and man up. With all these drawings that have been
changed and all the information that has been added, it is going
to take us some time to get all that information ferreted out to estimate what is on the drawings, to purchase it, schedule it, you
know, figure the changes, and get it worked out. So it is going to
take time.
The job isall during the job, we have had problems with getting
changes resolved and now we are in the midst of a whole new set
of drawings with lots of changes and it has got to be resolved. We
cannot continue to work indefinitely without resolution of anything.
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It is just kicked down the road. So we have got to have some kind
of timely resolution of all these issues.
And the cost has been significant to us and the time has been
extended. And it will get worse unless there is some resolution to
the issues that are outstanding.
So that is what I hope we can find a solution to is how do we
get things resolved and just do not keep kicking down the road.
Thank you.
[THE PREPARED STATEMENT OF MILLER GORRIE APPEARS IN THE
APPENDIX]
The CHAIRMAN. Thank you, sir.
Mr. OKeefe, you are recognized.
STATEMENT OF JOHN P. OKEEFE
Mr. OKEEFE. Chairman Miller, Ranking Member Reyes, Members of the Committee, my name is John OKeefe. I am the president of the National Group of Clark Construction.
I would like to thank the Committee for the opportunity to address two VA hospital projects constructed by Clark Construction,
the VA hospital in Las Vegas, Nevada, and the VA hospital in New
Orleans, Louisiana.
In 2008, the Department of Veterans Affairs selected the joint
venture of Clark Construction Group and Hunt Construction Group
to construct a new medical center in Las Vegas, Nevada. The
Clark, Hunt team has over 30 years of experience working together
to deliver a number of successful projects for our clients.
Clark Construction Group, founded in 1906, is today one of the
Nations most experienced and respected providers of construction
services with over $4 billion in annual revenue and major projects
throughout the United States.
Hunt Construction Group, another of the countrys largest construction companies, has been in business for over 66 years with
over $1.7 billion in annual revenue.
The Las Vegas VA medical center project was awarded to Clark,
Hunt, a joint venture, in September of 2008 and the notice to proceed was issued on October 22nd of 2008. The original contract
completion date was August 22nd, 2011 and due to time extensions
granted for changes to the project, the contract completion date
was extended to December 12th of 2011.
The project was completed on time. The VA has begun their activation of the facility including installation of medical equipment,
training, and maintenance of facilities. The Las Vegas VA medical
center is scheduled to begin treating patients by mid-summer of
this year.
On this project, Clark, Hunt, and the VA had an outstanding relationship. Our relationship and the open communication between
Clark, Hunt, and the VA proved critical in making the project a
success for both parties.
In 2009, the Department of Veterans Affairs selected Clark
McCarthy Health Care Partners in association with Woodward Design Build, Landis Construction as the contractor for the New Orleans VA replacement hospital. The team of Clark, McCarthy, Wood-
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Mr. Gorrie, in your testimony, you said you were working off a
fixed price contract but that the drawings were not complete at the
time, of the contract award.
How does that work? How can you do a fixed price contract without a complete set of drawings? Were the drawings complete when
you bid, or not complete when you bid? Did they say they would
give them to you at a later date?
Mr. GORRIE. Well, they changed substantially and they have
changed for the full 18 months we have been on the job. It has
been a progression of completion of the drawings.
Had they all been a hundred percent completed when we started,
we would not be here. I mean, we would have had completed documents. We could have planned and scheduled and worked through
the job like we would normally do.
But once we got up to a point where we had to work on the interior of the building and the space was not fully defined and not determined because equipment had not been selected and the drawings could not be designed around them, we were too blocked. We
had no place to work. So we had to scale back.
The CHAIRMAN. My question is, how can you do a fixed price bid
without having a complete set of drawings to bid off of, Mr. Dwyer?
Mr. GORRIE. You want to answer that?
Mr. DWYER. Mr. Chairman, we did have a representative, the
complete set of documents. There were roughly 25,000 pieces of
medical equipment in which the architect and engineers designed
by and designed to.
When you are designing a hospital, you want a design from the
medical equipment out, if you will. So there were a set of documents that were said to be complete and we had no reason to believe that they were not via the 25,000 pieces of equipment.
What lacked was the discipline of the administration, Veterans
Administration to lock down those selections of medical equipment
and they allowed the medical center in Orlando to go out and basically re-choose their equipment. Some they kept. Most of it they did
not. I think we are closing in on 28,000 pieces of equipment right
now.
So to answer your question, there was a finite set of documents,
but those changed. When we asked in November about three or
four weeks after mobilizing the job, we asked the question to the
administration or to our CFM Office, which is called an RFI request for information, and we asked simply for the list of medical
equipment. And that RFI as we sit here today is still outstanding.
So it is 18 months later. They have made some progress on the
medical equipment, but we are sitting here. That is how we were
able to do it.
The CHAIRMAN. During the bid process, were you allowed to ask
for information or additional questions?
Mr. DWYER. Yes, sir, we were allowed. There were four different
postponements of the bid which, you know, again questions went
in. Questions came back. I think we asked over 700 ourselves and
the competing contractors, I am sure, asked several themselves as
well.
But there was an addenda, which is another set of documents
that comes out prior to bid, which basically reissued every drawing,
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Mr. REYES. And in the interim, are you getting paid for the work
that is going on for this warrant directive?
Mr. DWYER. Yes, sir. Up to the warrant amount, yes, sir.
Mr. REYES. Has that been your experience, Mr. OKeefe, as well?
Mr. OKEEFE. No. Again, the change orders that we proceeded
with in the Las Vegas project, they were generally discussed openly
with the VA. We had very good communication with the VA folks
there on that project.
So when they issued something, we would provide them with the
pricing and we negotiated those as we went along. So things did
not pile up to the end of the job. They were handled, brought up,
handled, addressed by both sides of the team on a pretty timely
basis.
Mr. REYES. And both of you are dealing with the same department of VA? One is able to negotiate as you go and one is not. Am
I understanding that clearly?
Mr. DWYER. It appears that way.
Mr. OKEEFE. Yeah. I am not sure who they are dealing with, but
that was our experience at the Las Vegas project.
Mr. REYES. So if I were to ask you what would be your recommendation to the Committee about working with the VA and
what they need to do to provide better direction, better service to
the selected contractor, your answer would be dramatically different just based on your testimony here this morning?
Mr. OKEEFE. That is directed to me?
Mr. REYES. Yes.
Mr. OKEEFE. Yes. I mean, our experience has been that we have
had good communication with the VA people at Las Vegas and did
not experience those types of problems. And I think communication
is the key to these things. These are very large, complex, and complicated projects and issues are going to arise on every job.
And we feel that developing a teamwork approach where we are
all working toward the end mission, the real mission of providing
a first-class facility for our veterans and our military, is really
what is at stake and having that open, honest communication and
being able to bring up issues, put them on the table, resolve them
along the way so that they do not end up at the end of the project
all stacked up is key, critical to a successful project.
Mr. REYES. Thank you, Mr. Chairman.
Thank you, gentlemen.
The CHAIRMAN. Mr. Denham?
[No response.]
The CHAIRMAN. Mr. Webster, questions?
Mr. WEBSTER. Thank you, Mr. Chairman.
Mr. Dwyer, I do not think anybody is questioning the fact that
there are changes over a job as I have seen from little jobs to big
jobs that have change orders and there is pricing and so forth and
communication.
But it seems to me like, though, the magnitude of the number
of change seems to be what is in order here.
Tell me how many pieces of equipment were changed and you
are just now getting the documents necessary to install those.
What was the number again? It was thousands, wasnt it?
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Mr. DWYER. Sir, I do not know the exact number that has
changed out of the 25,000 original to 28,000 now roughly. But it
is safe to say the majority of those items have changed.
And as Mr. OKeefe said, you know, technology does change. It
changes at a rapid pace. And our communication on the site has
been very good with the on-site resident engineers.
Where we seem to have fallen short with Mr. OKeefes success,
if you will, of bringing resolution is going up to our contracting officer and there above. That is where we have fallen short with regard to resolution.
The 28,000 new pieces of equipment or revised pieces, again, in
January, mid-January, we had that blitz or the VA put a blitz on
with the designers to complete the medical equipment, major medical equipment. There were 52 different RFPs issued between January and really mid-March. Those RFPs resulted in 450 RFIs from
us, again, requests for information.
But the answers we got back on those were we had 60 more
RFPs forthcoming with the questions that we had. So we went
from 52, which supposedly, if you will, cleaned up the medical
equipment, to now 60 plus, so we are at 112, 113.
Mr. WEBSTER. So when you bid the job, there was a timeline/
schedule part of the construction and bid documents?
Mr. DWYER. Yes, sir, there was.
Mr. WEBSTER. In that timeline, was there a specified date that
the equipment would be either selected on the job? I assume it is
bought through the VA by some other contract. So it would be selected and on the job. Was there a time that that was stated in
that timeline?
Mr. DWYER. I am not sure about the timeline stated in the documents. But what was stated and what is assumed is that the pieces
of equipment that were on our bid documents which, again, it is
the obligation to provide a complete set of documents, we assumed
rightfully so that the equipment was what was going to be installed.
Mr. WEBSTER. Thank you, Mr. Chairman.
The CHAIRMAN. Mr. Michaud.
Mr. MICHAUD. Thank you very much, Mr. Chairman.
Mr. Gorrie, you had mentioned that the cost has been significant
to your company because of the delays in getting designs and what
have you. And we have heard about it being a fixed price. However,
we have also heard about change orders.
So on the cost, what exactly is it costing your company or are you
getting reimbursed for those so-called additional costs?
Mr. GORRIE. The short answer is no, but I will let Tim answer.
Mr. DWYER. The question of are we getting reimbursed for our
costs, when the job started changing rapidly, we actually increased
our manpower on the job both in the field and in the office, our
project management, and we went from eight project managers,
which is how we bid the job, to roughly 25 now on the project,
three times as many, just to handle the massive amounts of
changes that were taking place.
And what we have done or what we are obligated to do is submit
scheduled changes, if you will, they are called fragnets, but sched-
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uled changes with each change that we submit, RFP, and we submitted several hundred fragnets to this
Mr. MICHAUD. My question is, are you getting reimbursed for the
costs you are doing for the project?
Mr. DWYER. No, sir.
Mr. MICHAUD. You are not getting reimbursed for any of it?
Mr. DWYER. We have not been reimbursed for any of our additional people or time.
Mr. MICHAUD. And you do not expect to get reimbursed?
Mr. DWYER. We
Mr. MICHAUD. You have not, so I assume
Mr. DWYER. We fully expect to get reimbursed. It is just a matter
of when.
Mr. MICHAUD. Okay. Well, I guess, you know, looking at this
statement, and I quote, the problem on this project, the Orlando
project is unprecedented in your companys 48-year history.
I mean, what company would sign a fixed bid project knowing
I assume within that 48 years, you have dealt with the VA before
and with change ordersthat you are not going to get reimbursed?
Mr. DWYER. Well, we signed a fixed price contract knowing that
it was a completed set of documents or assuming it was a completed set of documents.
So we did not enter into the contract with a hope of being reimbursed for changes. We thought we would be dealt with fairly and
forthright and honestly. And thus far, again, we have only gotten
two fragnets back from the government that gave us 114 days in
a project that is arguably going to be much later.
Mr. MICHAUD. Okay. Mr. OKeefe, you are the president of the
National Group.
What company does not allow, when they negotiate contracts,
wouldnt a company assume that there is going to be change orders? Wouldnt that be part of some type of contract, whether it is
VA or any other Federal agency? Is it a common practice that fixed
price is fixed price?
Mr. OKEEFE. Yeah. Fixed price is fixed price for what is shown
on the documents. If there are changes made by the client after the
signing of the contract, there are provisions within the contract to
address those situations.
And it is very clear on how you proceed with the work and negotiate the cost and the time implications of any change. And when
those provisions are followed, that is very commonplace.
Mr. MICHAUD. So most companies do negotiate that proviso in
the contract if there are change orders that they will
Mr. OKEEFE. There are FAR clauses in the government contracts that dictate how that is handled. That is non-negotiable.
Mr. MICHAUD. I guess my other question is, when you look at
and this is for Mr. Gorrie or Mr. Dwyerwhen you look at the Orlando, you know, facility, you know, where has most of the problem
been dealing with the VA? Has it been with the project manager
at the facility level? Do they seem to know what they are doing or
has it been higher up at the VISN office or central office? Where
have you run into most of the problems with the VA?
Mr. DWYER. I would say that the on-site resident engineers are
very capable of handling the day-to-day issues. The amount of
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But, frankly, this is like deja vu. It is the bid process all over
again. We got cut off to ask questions when there were 4,500 drawings and just yesterday we were advised that we were supposed to
go back to work in two weeks after just receiving another, you
know, 1,000 drawings in the last six weeks.
Mr. JOHNSON. And, Mr. Chairman, I apologize. Maybe this question was asked. And if it is, we can move on.
Do you have a dollar figure assigned with these changes that you
have experienced so far? You got any idea how much this has driven the cost of this project up?
Mr. DWYER. Not specifically to the changes, sir. As far as the last
set, we have not put, you know, pencil to paper on that. But we
have provided a rough order of magnitude to one of the executive
directors of the VA. And we have a rough order of $120 million
plus over our contract amount right now.
Mr. JOHNSON. A hundred and twenty million plus over the initial
contracted amount?
Mr. DWYER. Yes, sir.
Mr. JOHNSON. Wow.
Mr. OKeefe, in your written testimony, you mention that Clark,
Hunt, and the VA had an outstanding relationship while working
on the Las Vegas medical center project.
Have you experienced the same type of relationship with the VA
on the New Orleans replacement hospital project?
Mr. OKEEFE. That project is at the very early stages. We have
less than three percent of the work in place. But we expect that
and we hope that we will have the same sort of relationship there
that we did in Las Vegas. And, in fact, we have taken our team
leader who led our project in Las Vegas and have moved him to
New Orleans to lead our project down there.
Mr. JOHNSON. Okay. In your opinion, is the location of the New
Orleans replacement hospital adequate and have any considerations been given to protecting this new facility from flood or water
damage should New Orleans experience the kind of severe weather
phenomenon that we have seen in the past?
Mr. OKEEFE. I cannot really speak to the choice of the property.
But the design has what they call a defend in place design where
it is fully functional for seven days in the event of a catastrophic
flood scenario.
And I am told that the design also has the ground floor being a
sacrificial floor. So, in other words, it can actually flood and have
the hospital still be fully functional.
Mr. JOHNSON. Okay. Mr. Chairman, I yield back.
The CHAIRMAN. Mr. Johnson, when you build it in a floodplain,
do you have to sacrifice certain floors?
Mr. JOHNSON. That is my understanding, Mr. Chairman.
The CHAIRMAN. Yes, sir.
Mr. Walz.
Mr. WALZ. Thank you, Mr. Chairman.
And thank the three of you for being here. Very much appreciate
it.
I think all of us are here for a common goal. That is to provide
the best facilities with the best possible care for our veterans and
they deserve nothing less.
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Thank you for helping us exercise our oversight responsibility because we can get the best facilities, the best care and should be expected to do it in the most cost-efficient manner for the public. So
this is helpful to me.
Mr. Gorrie, would you work with the VA in the future?
Mr. GORRIE. Sure.
Mr. WALZ. Assuming we get changes. It is important, though,
right? It is important to have us there. We need the private sector
to be there and the VA is an important part of this business. They
build a lot of hospitals. So we want to make this work right.
Mr. GORRIE. Right.
Mr. WALZ. Okay. Now, the one thing this will help us with, and
I guess you are starting to suggest some of the things or whatever,
but this is our opportunity. Coming after you is going to be all the
people you said you did not get to ask all the questions to.
What should I ask them? What should those of us ask the next
panel that comes up here to help fix this for you if you get the opportunity? And they will sit right where you are and they will answer our questions. What should I ask them from your perspective
to make this better, make sure you can do it in the future?
Mr. DWYER. I guess I would ask them have they listened to the
contractor and the suggestions being made by one of the largest
contractors in the country that does health care work, what needs
to take place and when it needs to take place.
And the answer to that is that we have suggested that this new
set of documentsagain, keep in mind the hospital has been suspended now for 12 months out of our 18, but we have suggested
that we cannot look forward without looking in the past.
So what we suggested was doing a, if you will, a clean slate approach where we would use eight weeks to digest these documents
to make sure we have submittals in order. We do not know what
they are, so we have got to get submittals from our subcontractors.
We have to price the documents. We need to reschedule the job. We
potentially need to re-sequence the job.
We have made a suggestion to them that they give us an RFP
to look at accelerating the project to see value added, if you will,
so we can get the veterans in early, you know, for a certain value.
We have to redo our modeling. So there are a lot of suggestions
that we have made and I guess the question to them is, why arent
you listening?
Mr. WALZ. So this reset, you think, has the potential to not only
get us back on the right track but to potentially save taxpayer
money and get the project moving forward.
But it is like we are in this, we have hit and we are stuck in
this lane and we are continuing to go down it no matter what happens, is that
Mr. DWYER. Yes, sir. And we are not only potentially stuck in the
lane, but we could be very well off the rails before we know it again
if we are not careful with the start work order two weeks from now
on 4,600
Mr. WALZ. Is there a precedence to reset in projects like this?
Mr. DWYER. I cannot answer that.
Mr. WALZ. Okay. Mr. OKeefe, do have anyand I appreciate
that because this would be the question to askwhat should I ask
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Mr. GORRIE. Sure. I mean, there would not have been a problem.
I mean, as far as our concern, it would not have been a problem
if it was cost plus. We would have been compensated.
Mr. MCNERNEY. But it would not have helped the project get
done any sooner or anything?
Mr. GORRIE. I mean, if we had been given authority to make certain decisions, I mean, it might not have sped it up, but it would
have resolved the contract issues we have and the resolution of
changes. If it was cost plus, it would not have been any conflict as
to the taking care of the changes.
The problem we have now is that the changes have not been resolved and we have taken it up the chain, but we are here. This
is the top of the chain and we are trying to get them resolved.
What do we do now?
Mr. MCNERNEY. So from your point of view, it would not have
been better to have a cost plus, but it would have still been much
more expensive than originally estimated if it was a cost plus?
Mr. GORRIE. Yes, I would guess so because the changes occurred
after we started. And the most efficient thing is for the documents
to be complete and correct and you start, you manage the process
from the beginning and you can organize the flow of work.
When it begins to change, regardless of the nature of the contract, the costs are going up because you are disrupting the flow
and you are changing the game at midstream. So it has got to run
the costs up regardless of the nature of the contract.
Mr. MCNERNEY. So let me ask a question or two for both of the
witnesses about your experience and interacting at the project
management level.
Was the VA project management well informed and knowledgeable in your opinion? Was there sufficient oversight from the VA
on the ground?
Mr. OKEEFE. With regard to the Las Vegas project, our belief is
that the VA staff on the ground at the project site performed very
well. Again, it was a very good relationship, open communication,
took each of the issues as they came and resolved them.
I am not sure about the oversight. I really cannot speak to it because I do not believe that many of those issues bubbled up beyond
what was occurring at the project site.
Mr. DWYER. The on-site personnel for Orlando is very capable
and has been willing and the lines of communication have been
open. You know, our trailers literally are right next to each other,
so we walk, you know, it seems like every hour over there back and
forth.
With regards to upper management being informed, I would venture to say that they were not totally informed of what was going
on.
Specifically in our main meeting with the senior contracting officer, he advised us that he was looking after 60 different projects
and so that, you know, arguably Orlando is one of the largest, but
still it is a lot of projects to look over.
Mr. MCNERNEY. I mean, that kind of gets to the point then.
There was probably insufficient VA resources from one department
or another devoted to this program as opposed to having competence at some level; is that right?
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Mr. MICA. So, I mean, Mr. Webster was an HAV contractor. Then
I was a developer. You have got the design now.
When do you think we can open the door? I have got to go back
Thursday and they are going to ask me, veterans, when is that
thing going to open. So do you guys know?
Mr. DWYER. I think the answer lies with your statement of we
just got the drawings. So if we are
Mr. MICA. So mid-April, you can tell us or the end of April, you
can recalculate again and then give us a definite
Mr. DWYER. You know, we are sitting here, you know, end of
March, so that would be a fair assessment.
Mr. MICA. Okay, because I
Mr. DWYER. Mid to end of April, we would be able to give you
a
Mr. MICA. Because VA is telling us something different, next
summer, and that does not appear to be realistic since you just got
the drawings and there may be even more change orders coming.
Mr. DWYER. I would definitely tell you that the project will not
be open in the summer of 2013.
Mr. MICA. Couple of quick questions. The other thing is the only
good news is that I heard this is going to come in under budget
and I had heard figures.
Now, I just heard some figures that you told me that at least $30
million more for something and all these change orders, all of
these, again, being in development, contracting over here.
When you do a change order, there are costs. So are we looking
at under budget or are we looking at over budget or what?
Mr. DWYER. Under our current contract value, Mr. Mica, we, you
know, provided a rough order of magnitude and this is a guess because, again, the documents are still out there. We do not know
when the job is going to
Mr. MICA. So it could go over?
Mr. DWYER. Not could. It will.
Mr. MICA. I will go over. That is not happy news for the taxpayers because we thought we were going to have, again, lower
cost on this, but I guess the confusion has a price tag.
There were 400 workers. I have folks that are losing their homes,
people that cannot survive week to week because they do not have
a construction job. There were 400 people on the job and I was told
11 to 12 hundred should be on the job.
When do you think we will have that number?
Mr. DWYER. If we have a chance to assess, recalculate where we
are, we would think in the next six to eight weeks we would have
a full plan in place assuming we got, you know, a price put together and accepted change order.
Mr. MICA. So maybe next summer? I mean
Mr. DWYER. This summer.
Mr. MICA. This summer rather, this summer
Mr. DWYER. this summer, sir.
Mr. MICA. We might be up to full employment?
Mr. DWYER. Yes, sir.
Mr. MICA. Finally, Mr. Chairman, just one point of privilege. My
Committee oversees FEMA and weon the New Orleans project.
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This is a good update for all of us because in 2005, we had the hurricane.
June 1st, 2009, I went out four years later and did a hearing in
a boarded up Charity Hospital, which now is under construction;
is that correct? Isnt Charity under construction?
Mr. OKEEFE. The New Orleans project is under construction
now, yes.
Mr. MICA. And the VA hospital is right across the way. The VA
hospital, of course, now, there are extenuating circumstances because of some of the local issues. But we really have not started
construction on the VA hospital, not to mention that the old VA
hospital is supposed to be converted to a clinic; is that correct?
Could you have your staff work with our staff to see what is going
on there?
This, last time I checked today was, March what, 27th, 2012, and
New Orleans, we are still a long ways away. Charity Hospital,
which is boarded up, we had it un-boarded, did the hearing there,
and also focused on the VA.
That was not their fault. That was governments fault. FEMA
would not make a decision. That is when we said in an arbitrary
manner to move forward with decisions for both VA and private
sector reimbursement.
But our Committees will be glad to work with you because it
sounds like New Orleans is headed downstream instead of upstream.
Thank you. Yield back.
The CHAIRMAN. Ms. Brown.
Ms. BROWN. Thank you, Mr. Chairman. And I want to thank you
for having this hearing today.
This is very important to me and very important to my district.
I have worked on this project for over 25 years and I guess I have
adopted the military motto, what do you do when failure is not an
option. You get the job done. We want to get this online as quickly
as possible.
I have talked with the developers and I have talked to the VA.
And, sir, I just need to know one of the problems, and you know
I know about the problems that we have had in the facility, and
I will not even go on record with all of the problems that we have
had with the work going on there, but it seems to be a roofing
problem and an equipment problem so you cannot finish until you
know exactly what kind of equipment and, of course, we are waiting for the latest equipment.
Can you tell me what it is that we can do to expedite this project
because I really do not haveI am like my veterans now. I do not
have a lot of patience. And they think we are trying to wait until
they pass away and that is not true. The facility is looking good
physically on the outside, but I want to know what we need to do
to complete it.
And I really wanted to know how we would expedite it as opposed to talking about what kind of delay. And to me, I have a
problem when you or when we have all of the money and then we
still cannot get the work done.
So, Mr. Gorrie, who is going to answer my question?
Mr. DWYER. I will.
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Mr. GORRIE. We just got hundreds of changes that are not converted into change orders that are billable, that are just sitting out
there.
Mr. BILIRAKIS. Yeah. Give me a specific example.
Mr. GORRIE. Tim, you will have to.
Mr. DWYER. Well, a specific would be or a general would be this,
would be getting a change order, again, for the electrical work associated with the access control system. That would be a good
change.
That access control system which is our security and card access,
we are still working through that change order of submitting pricing, resolving pricing. We are gaining on the process, but it is still
lagging significantly behind.
Again, the main problem is having under-funded changes where
the change order is not even funded to the independent government estimate. You will have a government estimate of $500,000
and we will get a change order for $100,000.
So we are in turn funding the project for that specific change, et
cetera. And now multiply that times, you know, a couple hundred.
And, you know, there is $30 million roughly of issues out there that
still have to be resolved.
I guess another specific would be the head wall issue. And a
head wall in a hospital is where the bed comes in and you plug in
your medical gas, oxygen, et cetera, to that wall. The original design had a single head wall, basically one line across and you plug
it in.
Well, they changed the design to a vertical two wall head wall
system. That change is still out there. We think we have gotten the
information we need. We have not gone through the documents. We
just got them again. But there is a specific change. That has been
out there for eight months plus and we still are sitting here talking
about it.
Mr. BILIRAKIS. Okay. Thank you very much.
I yield back, Mr. Chairman.
The CHAIRMAN. Dr. Roe.
Mr. ROE. Thank you all.
I am sorry I am a minute late. I had another meeting. And I am
an Eagle Scout. I have an orienteering merit badge. I got off the
wrong elevator in Rayburn and wandered around. So if you have
ever been in there, you understand.
I had an opportunity last night to read the testimony and to go
through this in some detail.
And just to give you a little bit of my background, I was in private medical practice for 31 years, but I was also Mayor of the city,
Johnson City, Tennessee. And we bid projects all the time.
And just to give you a little bit of an example, we are working
on $100 million worth of sewer, water and sewer projects now that
have been contracts let, engineering contracts, job done, $22 million in roads, $50 million in schools. Personally our practice built
a $25 million office building we have been in three years. I have
seen two hospitals go up in my time.
I have never seen anything like this. This is beyond pale. I do
not know how you can bid a project. We typically put back about
ten percent for change orders. And I almost do not recall the
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change orders from the original design doing what you are talking
about.
When I read your testimony last evening and I can understand
Ms. Browns frustration about not having the hospital. You cannot
complete a hospital when the target moves all the time and when
the design changes all the time.
And I think you made the statement, one of you did, your problems on this job are unprecedented in our companys 48-year history. That is pretty telling, a company that is a half a century old
and has never run across.
And I can promise you if the conditions keep changing, you will
never get it done. And it costs more.
How can you even bid a project when you do not know what the
project is going to look like or it changes during that time and you
do not get funded properly to do the change order? How do you do
that? How do you make money doing that?
Mr. DWYER. Well, first of all, you bid the project with the documents, as Mr. OKeefe said and I mentioned earlier, you have to
bid the documents as you see them and as they are produced.
Mr. ROE. That is the way it typically works.
Mr. DWYER. And part two to that, how do you make money, you
do not if it continues to change. You know, there are several folks
that relish, frankly, the change order process and look at it as an
opportunity. We on the contrary do not. We look at it as an impediment to us getting finished. We would much rather be building the
4,500 original drawings than the 10,000 new ones.
Mr. ROE. Well, clearly when you do a sealed bid, as I am sure
you did, that is the way we bid all of ours, you did a sealed bid
and you picked the bid up on Friday afternoon and whenever you
opened the bid, you bid based on the documents you had to go by.
Now, I know when I did a little work in my house, my contractor
said, yeah, doc, we can do whatever you want as long as you have
got enough money.
Mr. DWYER. Right.
Mr. ROE. So they do not mind the change orders as long as you
fund them. You are right about that. But it is much simpler for you
to finish onand none of these projects, all these projects I am
talking about, I do not remember any of them going but about a
month maybe. The two hospitals were in under the time because
the documents, the engineering, the architectural drawings were
there and it got done by the contractor.
And obviously your business is a highly qualified contractor or
you would not have been in business for 50 years.
So, I mean, how do you resolve this? I have never seen such a
mess in my life when I read it. How do you all
Mr. GORRIE. We have not either.
Mr. ROE. How do you get out of this mess is what I am saying?
And Ms. Brown, I certainly can understand her frustration because the hospital for the veterans is not completed.
But like you said, I understand those walls completely. I have
plugged the stuff in them.
Mr. DWYER. I think the answer, again, first of all, the project was
awarded on a best value, so it is a price as well as your technical
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And at this time, Dr. Petzel, you may proceed with your testimony.
STATEMENT OF ROBERT A. PETZEL, UNDER SECRETARY FOR
HEALTH, VETERANS HEALTH ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS; GLENN D. HAGGSTROM,
EXECUTIVE DIRECTOR, OFFICE OF ACQUISITIONS, LOGISTICS, AND CONSTRUCTION, U.S. DEPARTMENT OF VETERANS
AFFAIRS, ACCOMPANIED BY: ROBERT L. NEARY, JR., ACTING
EXECUTIVE DIRECTOR, OFFICE OF CONSTRUCTION & FACILITIES MANAGEMENT, U.S. DEPARTMENT OF VETERANS
AFFAIRS; BART BRUCHOK, RESIDENT ENGINEER, OFFICE OF
CONSTRUCTION & FACILITIES MANAGEMENT, U.S. DEPARTMENT OF VETERANS AFFAIRS
STATEMENT OF ROBERT A. PETZEL
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Mr. HAGGSTROM. Mr. Chairman, if you look at it, they were both
for fixed price contracts in terms that we had a best value selection
on the contractor to construct these facilities.
The CHAIRMAN. And our time is going to be limited, so I apologize again for interrupting, Dr. Petzel.
Why the problem? If they were pretty much the same types of
contracts, why is one contractor saying there were significant
issues with the drawings and the change orders and Clark saying
differently?
Dr. PETZEL. To reiterate what I said before, it is common practice. The question is the timing between the final determination of
the need for equipment and the execution, the complete execution
of that facility.
You generally have stub-in of utilities in places like the operating
room and radiology and then as the final decisions are made about
the equipment, those are turned over to the contractor as augmented drawings, as I understand it.
And the process in Orlando was identical, as I understand it, to
the process
The CHAIRMAN. Has the stub-in taken place?
Dr. PETZEL. I would have to turn to Mr. Haggstrom, the stub-ins
for the equipment.
Mr. HAGGSTROM. Yes, sir. For the most part, the base of design
rough-ins have occurred. There are some pieces of equipment that
changed from perhaps a floor or wall mounted piece of equipment
to ceiling mounted in which case, you will have some structural impacts. But the contractor has gone to a certain point with those
rough-ins.
The CHAIRMAN. Were the same design team and engineers used
in this project or were they different designers and engineers?
Dr. PETZEL. Mr. Neary.
Mr. NEARY. Mr. Chairman, they were different architectural and
engineering firms that designed the two projects.
The CHAIRMAN. Do they bid the project the same way as a general contractor does? How do you select your design and your engineering team?
Mr. NEARY. Certainly. We select architects and engineers under
a process which is generally referred to as the Brooks Act legislation that allowed quality-based selections of architectural and engineering firms.
So firms compete with one another based on their quality, their
strength of the company, experience in doing the type of work that
is going to be done. They are rated and ranked by a team of experts and then we would negotiate price with the highest ranked
firm. Assuming we can come to agreement, they would be the firm
put under contract. If there were a problem, we could go to number
two.
The CHAIRMAN. Have you ever before used the firm team that
you used for Orlando?
Mr. NEARY. The Orlando architect was a joint venture of a firm
known as Ellerbe Becket in joint venture with a firm from Winter
Park, RLF. We have used both of those companies. We used Ellerbe
Becket extensively.
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More recently Ellerbe Becket was acquired by a larger firm, architectural firm known as AECOM. I do not know that we have
used AECOM very much, but that was pretty late. That was late
in the process.
When AECOM came in and we alerted them to some of the problems we had experienced, I think they were quite responsive in
making some changes in the teams that they had working on the
design.
The CHAIRMAN. Would you ever use them again?
Mr. NEARY. We will have to evaluate firms going forward based
on their status and what kinds of work they are doing and the
quality of that work.
The CHAIRMAN. Based on the quality
Mr. NEARY. Certainly AE
The CHAIRMAN. based on the quality of work done by Ellerbe
Becket, who has been purchased by somebody else, and the other
firm, do you feel satisfied with the work product they provided?
Mr. NEARY. The work product, I would not comment so much on
the AECOM because they came in very, very late. But the earlier
work product had many, many problems as has been discussed.
The CHAIRMAN. And discussed by the contractor, correct?
Mr. NEARY. Discussed by the contractor here today, discussed by
the VA, and recognized by the VA.
The CHAIRMAN. I did not hear anybody at the table discuss problems with the design firm.
I am sorry. Dr. Petzel, did you in your testimony refer to many
problems with
Dr. PETZEL. No, sir, I did not. But we need to acknowledge the
fact that there were problems with the design of the electrical that
did add
The CHAIRMAN. That was all, just the electrical? That is the only
design problem that there is?
Dr. PETZEL. I would ask Mr. Neary and Mr. Haggstrom to comment on that.
Mr. NEARY. The electrical area is the area that had the most significant and noticeable errors.
The CHAIRMAN. What about the roof? Was there a design issue
with the roof or was it improperly installed?
Mr. NEARY. There is a design issue with what is known as a
super roof. I will ask Mr. Bruchok to talk in more detail.
Mr. BRUCHOK. Yes, sir. There is a mixture of causes. The initial
installation, there were some deficiencies. We did discuss with our
AE consultant and his roof consultant the validity of that design
and the application for that building. And we are still researching
the results of that.
But the VA acknowledged that there might be another path
going forward in discussions with the contractor. That was what I
would call one of the success stories of the project. We did work
with the contractor and our engineer to come up with an alternate
roof installation, a lightweight concrete product that they are making very good progress on as we speak.
The CHAIRMAN. What is amazing to me is when I first found out
about this issue, one of the things that VA threw up right away
was the fact that the roof leaked, giving the impression that the
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contractor had improperly installed the roof. Now you are telling
me that is not the case.
Mr. BRUCHOK. Not exactly, Mr. Chairman. I am sorry if I am
confusing the issue. The initial installation of the original design,
we did note some deficiency issues and that roof did have the potential to leak.
There were other areas of the building that were not yet roofed
where we were getting water infiltration which I think has been
broadly reported as a leaky roof. But in those cases, there was no
roof.
So when we had some questions about the quality installation,
we stopped, worked with the contractor and the engineers of
record, and came up with this alternate approach.
The contractor and VA entered into a no-cost bilateral agreement
to make that change and, again, they are proceeding with that new
product as we speak.
The CHAIRMAN. Mr. Reyes.
Mr. REYES. Thank you, Mr. Chairman.
All these firms that you are discussing they are all bonded, correct? That is a requirement?
Mr. HAGGSTROM. Yes, it is.
Mr. REYES. And the reason I am asking this question, and maybe
it is a good time to ask you, Dr. Petzel, can you react to that statement from Mr. Gorrie that said this project is going to be about
$120 million above the original cost? I would like to get your take
on that.
Dr. PETZEL. I will just briefly comment on it and then I will ask
Mr. Haggstrom to speak in some more detail.
We do not know what the change orders that are being discussed
by the contractor, what the eventual cost of those, if any, is going
to be. Those things are all under discussion, as I understand it,
right now. So it is impossible to comment on what, if any, costs
there might be additional to what we see right now.
Mr. Haggstrom.
Mr. HAGGSTROM. Dr. Petzel, thank you.
Mr. Reyes, clearly we know there is going to be an increase in
cost in this facility. Roughly up to this point in time, we have
issued about $15 million and paid $15 million in change orders connected with those things.
I did receive a correspondence from Brasfield & Gorrie I think
about a week, week and a half ago that kind of laid out these costs
that they looked at.
Until we get to a point in time where we can start to quantify
what these costs are and work with the contractor, I do not have
a final cost on this project.
Mr. REYES. When will that time be?
Mr. HAGGSTROM. That is going to be, I believe, an iterative process, sir. As Brasfield & Gorrie goes through and looks at the most
recent drawings that we provided them, looks at the impact to
their schedule, they will come back to us and work and provide a
cost which we will then review and probably go into negotiations
with them over what the value of that perhaps work stoppage or
work delay is along with any additional material cost.
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Mr. REYES. As it pertains to the Orlando facility, because although I am a long way from there, these are veterans that are
being impacted because of the delay in the process and taxpayers
are being impacted because of a potential, as was testified here, of
$120 million over the original cost of the facility.
So my question is, in terms of the bonding capacity, are they on
the hook as well in these negotiations between you and
Mr. HAGGSTROM. Conceivably, yes, if it came to that, which we
would never want it to come to that because both of us are losers.
If we have to involve the sureties to correct the and finish the hospital, VA would never want to see that happen. I firmly believe
Brasfield & Gorrie would never want to see that happen.
But if I could, Mr. Reyes, while not to minimize the delay in the
hospital there, there are absolutely no veterans in the Orlando area
that are going un-serviced as a result of the delays associated with
this hospital.
The VA has ensured and made sure that all the veterans cares
whether it can be provided at our current facility or through facilities in the community or, yes, they do have to sometimes travel to
other VA facilities, those needs are being met without question.
Mr. REYES. And I appreciate that.
Perhaps the final question I have, are any of you four directly
in consultation, negotiations with the contractor, you know, that
can testify about the 10,000 changes and modifications and all of
that?
Mr. HAGGSTROM. Yes, we can, Mr. Reyes, if you would allow me.
Mr. REYES. Please.
Mr. HAGGSTROM. Mr. Bruchok, Bart, is our senior resident engineer. He is on the job site daily. Mr. Neary as the Acting Director
of Construction & Facilities Management, he is assigned here in
VACO. At their office, they have weekly and monthly dialogues in
terms of the status of construction.
I am also assigned here in VACO. Mr. Neary is a direct report
to myself. And we do have recurring meetings in terms of looking
at issues with our construction.
Mr. Bruchok, he is on the ground, though, and can address if you
have any
Mr. REYES. Okay.
Mr. HAGGSTROM. specific issues on RFIs.
Mr. REYES. Well, perhaps you could react to all the change orders numbering in the thousands. Certainly from my perspective,
although I have a limited background in this, it seems just way beyond whatever the industry standard may be.
And I understand and appreciate that hospitals are unique when
they are constructed. But in my district, there have been two or
three private hospitals that have gone up and they have not experienced any of these kinds of issues.
But can you give some perspective to the changes and perhaps
the $120 million projected cost over the original?
Mr. BRUCHOK. Yes, Mr. Reyes. Appreciate the opportunity.
Just to clarify, there is a couple numbers that were thrown out.
The thousands number refers to RFIs, I believe, were over 3,000.
Those are questions that the contractor asks of the VA and ulti-
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length of time it has been suspended, you just issued a lift of the
suspension that allows them to begin work; they have asked for a
period of weeks to be able to reschedule, to get ready to start again,
I think it is about eight weeks is what they have asked for, yet you
have told them or somebody has told them that they have to be up
and fully functioning on that job by the 13th of April; is that correct?
Mr. HAGGSTROM. That is what we directed them and that was in
direction to the diagnostic and treatment portion of the hospital
which was where the partial work stoppage was given to them.
We were advised I believe about a week or so ago that effective
yesterday, they would begin full mobilization again to begin work
on the clinic.
So there are portions of the hospital that can be worked. If you
look at it, it is the inpatient piece of it, the D&T, the diagnostic
and training, the clinic, and then the atrium.
We viewed in looking at those schedules that because of the way
the schedules were laid out and the questions and the workflow
stream that there was work that could be done in the D&T area
while they continued to get their subcontractors together and have
an opportunity to review the drawings that we provided to them
over these past weeks.
The CHAIRMAN. Mr. Bilirakis.
Mr. BILIRAKIS. Thank you, Mr. Chairman. I appreciate it.
Why is the medical equipment procurement so far behind?
Mr. HAGGSTROM. Mr. Bilirakis, we take accountability for that as
the VA. As Dr. Petzel I believe has stated, it is our desire to get
the most modern and up-to-date technology in terms of outfitting
our hospitals to serve our veterans.
In this particular case, that time frame went too far forward. We
should have made decisions earlier in the process that would have
allowed us to provide to Brasfield & Gorrie the necessary changes
and drawings for them to be able to proceed.
Mr. BILIRAKIS. Is this modern equipment not available?
Mr. HAGGSTROM. The equipment is available. It is a decision
from the clinicians on what best piece of equipment meets their
needs. Once that is established, it is then put into the procurement
process and the procurement process can take a period of time, especially for this equipment, to procure, get the specifications, turn
those specifications over to our A&E and make the necessary modifications to the drawings.
Mr. BILIRAKIS. Okay. Mr. Petzel and Mr. Haggstrom, I have a
question. You mentioned in your testimony that 30 additional on
the ground engineers will be hired to more effectively manage and
oversee the VA construction projects.
One of the complaints from Brasfield & Gorrie was that the VA
staff on site was both limited and unable to resolve the major information issues.
Has the VA given the new site managers any additional authority in your plan to use these site managers in Orlando?
Mr. HAGGSTROM. We have made several changes to our process,
Mr. Bilirakis. First of all, we did increase staff at the Orlando
project to help support and go through the request for information
and work our processing on the change orders. So we increased our
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staff by about eight engineers on site along with the necessary administrative staff.
We also looked at some internal processes that we could take
that would allow us to accelerate the decision-making process that
goes with those change orders. So in agreement with our legal
counsel, we made some adjustments as to the value of those change
orders that would then require OGC review as opposed to allowing
our contracting officer to make those changes unilaterally.
Mr. BILIRAKIS. I know this question will be asked a couple times.
When do you anticipate the project to be completed, the Orlando
project?
Mr. HAGGSTROM. Based on an evaluation by our A&E firms and
the subject matter experts such as our construction management
teams that are on site, we believe that a reasonable period of time
to complete this project would be the summer of 2013.
Mr. BILIRAKIS. Summer. Thank you very much.
I yield back.
The CHAIRMAN. Ms. Brown.
Ms. BROWN. Sir, I got to tell you I am on this Committee for one
reason, because it is my service to the country. And I have got to
tell you that I am not a happy camper.
The idea that we possibly could spend an additional $130 million
is not acceptable. So everybody needs to know that is not going to
happen.
But, I mean, if you look at where we are, I worked extremely
hard getting these projects through, getting the authorization for
years. I mean, we worked on this particular project for the VA in
Orlando for 25 years.
Now, what does it mean? I know that they are not receiving the
service or everybody is receiving service, but we are talking about
a step-up service. We are talking about 1,400 jobs and opportunities to hire people in the profession.
We are talking about the VA being the catalyst for research at
the University of Florida, the University of Central Florida, the
childrens hospital and the research institute. We are talking about
putting people to work but serving the veterans.
And 2013 is just not acceptable to me. It is not. So what we have
is a step backward.
I want to know what we can do to expedite this project. And I
am not interested in bringing in another group of consultants. I
want to know what can the VA do, what can the construction group
do.
Everybody elses project around the country is online, on time except mine. What can we do? What can we do? The military would
say failure is not an option. We built a bridge in Minnesota in a
matter of months. We put incentives in there and we got it done.
I want to see that happen here.
I am not going to casually sit here and say it is okay that we
are going to have a delay of 13 months or a year later. That is not
acceptable for me. I need to know what can we do, VA.
Mr. HAGGSTROM. Would you like me to answer now?
Ms. BROWN. I am waiting.
Mr. HAGGSTROM. Ms. Brown, we share your frustration and
where we are we believe is unacceptable also. We are very grateful
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[Office of Construction and Facilities Management subsequently provided
the following status report:]
Charlotte, NC
Health Care Center (HCC)
Purpose: To update Congressional members on the status of VAs Health Care
Center (HCC) lease procurement in Charlotte, North Carolina.
Background: This project proposes the acquisition of a 295,000 net usable square
foot HCC in Charlotte, NC. This new HCC will enable VA to consolidate outpatient
specialty services and better serve VISN 6 the needs of Veterans and their families.
The HCC will include Specialty Medical and Surgical services in addition to a wide
array of outpatient services. This is a two-step lease procurement for a term of 20
years, and will include approximately 2,400 parking spaces.
Discussion: VA selected a 35 acre parcel, at the southeast corner of the intersection of Tyvola Road and Cascade Point Boulevard, Charlotte, NC and entered into
an Assignable Option contract in August 2011. Since that time, VA and the land
owner have been negotiating a sales price for the land. Through a lengthy process,
that included three appraisals, an agreement was reached in March 2012. VA is
now pursuing real estate and environmental due diligence on the site, and will concurrently develop the schematic design and technical aspects of the Solicitation for
Offers (SFO) document. The SFO will be used to procure a developer who will purchase the site, construct the clinic and then lease it back to VA for 20 years.
Next Steps: Following an advertisement for developers, the SFO will be issued
in late Fall 2012, followed by a Pre-Bid Conference. After initial offers are received,
VA will conduct both price and technical evaluations on the offers. Lease award is
anticipated in late Spring/early Summer 2013. Building design and construction is
estimated to be complete in late Spring/early Summer 2015 with HCC activation to
follow.
Prepared April 2012
Office of Construction and Facilities Management
Fayetteville, NC
Health Care Center
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Prepared April 2012
Office of Construction and Facilities Management
Loma Linda, CA
Health Care Center
Purpose: To update Congressional members on the status of VAs Health Care
Center (HCC) lease procurement in Loma Linda, California.
Background: This project provides for the lease of a 271,000 net usable square
foot HCC in Loma Linda, California. Creation of the HCC will allow the Loma
Linda medical staff to deliver services with greater efficiency and will house Dialysis, Nephrology, Oncology, Prosthetics, as well as elements of Primary Care, Dental
Health, Mental Health, Womens Health and various other services. The lease will
be for a 20 year firm term. This is a two-step procurement and will include approximately 1,500 parking spaces.
Discussion: VA advertised for 32 acres of land in Loma Linda, CA, and is working on an assignable option with the landowner. Once the land option is executed
and a sales price determined, VA will pursue real estate and environmental due
diligence on the site, and concurrently develop the schematic design and technical
aspects of the Solicitation for Offers (SFO) document. The SFO will be used to procure a developer who will purchase the site, construct the clinic and then lease it
back to VA for 20 years.
Next Steps: Following an advertisement for developers, the SFO will be issued
in late Summer 2012, followed by a Pre-Bid Conference. After initial offers are received, VA will conduct both price and technical evaluations on the offers. Lease
award is anticipated in Spring 2013. Building design and construction is estimated
to be complete in Spring 2015 with HCC activation to follow.
Prepared April 2012
Office of Construction and Facilities Management
Monterey, CA
Health Care Center
Purpose: To update Congressional members on the status of VAs Health Care
Center (HCC) lease procurement in Monterey, California.
Background: This project is for a 99,000 net usable square foot HCC in Monterey, California. The proposed HCC will be a joint, integrated facility between VA
and Department of Defense (DoD); DoD will occupy 16,000 nusf of the total 115,000
square footage. The proposed HCC would enhance existing VA outpatient services
in the Monterey County region by expanding primary care, specialty care and mental health services. Laboratory, Radiology and Pharmacy services will also be available within the proposed HCC. The lease will provide the VA Palo Alto Health Care
System (VAPAHCS) with the necessary space to accommodate their growing workload within the Monterey County area, and room to expand the clinical capacity of
primary and specialty services closer to the Monterey Veteran population, and meet
VAPAHCS strategic goals. This two-step lease acquisition will be for a term of
twenty (20) years and will include approximately 900 parking spaces.
Discussion: VA selected a 14-acre site located a block away from the intersection
of 9th Street and 2nd Avenue, Marina California, and is working on the assignable
option to purchase. VA is pursuing real estate and environmental due diligence on
the site, and will concurrently develop the schematic design and technical aspects
of the Solicitation for Offers (SFO) document with DoD. The SFO will be used to
procure a developer who will purchase the site, construct the clinic and then lease
it back to VA for 20 years.
Next Steps: Following an advertisement for developers, the SFO will be issued
in late Fall 2012 , followed by a Pre-Bid Conference. After initial offers are received,
VA will conduct both price and technical evaluations on the offers. Lease award is
anticipated in late Spring 2013. Building design and construction is estimated to be
complete in late Spring 2015 with HCC activation to follow.
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42
Montgomery, AL
Health Care Center (HCC)
Purpose: To update Congressional members on the status of VAs Health Care
Center (HCC) lease procurement in Montgomery, Alabama.
Background: This lease project is for a 112,000 net usable square foot HCC in
Montgomery, Alabama. The HCC will provide for Primary Care, Specialty Care,
Mental Health, and Ancillary and Diagnostic services for Veterans in the Montgomery area.This is a two-step lease procurement for a term of twenty (20) years
and will include approximately 900 parking spaces.
Discussion: VA selected a 35.854-acre site located at the intersection of Chantilly
parkway and Ryan Road, Montgomery, AL, and entered into an Assignable Option
contract in December 2011. Since that time, VA has pursued real estate and environmental due diligence on the site, and has been concurrently developing the schematic design and technical aspects of the Solicitation for Offers (SFO) document.
The SFO will be used to procure a developer who will purchase the site, construct
the clinic and then lease it back to VA for 20 years.
Next Steps: Following an advertisement for developers, the SFO will be issued
in late Summer 2012, followed by a Pre-Bid Conference. After initial offers are received, VA will conduct both price and technical evaluations on the offers. Lease
award is anticipated in Winter 2013. Building design and construction is estimated
to be complete in Winter 2015 with HCC activation to follow.
Prepared April 2012
Office of Construction and Facilities Management
Winston-Salem, NC
Health Care Center (HCC)
Purpose: To update Congressional members on the status of VAs Health Care
Center (HCC) lease procurement in Winston-Salem, North Carolina.
Background: This project proposes the acquisition of a 280,000 net usable square
foot HCC in Winston-Salem, North Carolina. This new HCC will enable VA to consolidate outpatient specialty service and better serve the needs of Veterans and
their families. The HCC will include specialty medical and surgical services in addition to a wide array of outpatient services. This is a two-step lease for a term of
20 years and will include approximately 2,200 parking spaces.
Discussion: VA selected a 40-acre site located on Kernersville Medical Parkway,
Kernersville, NC, and entered into an Assignable Option contract in February 2012.
VA is pursuing real estate and environmental due diligence on the site, and concurrently developing the schematic design and technical aspects of the Solicitation for
Offers (SFO) document. The SFO will be used to procure a developer who will purchase the site, construct the clinic and then lease it back to VA for 20 years.
Next Steps: Following an advertisement for developers, the SFO will be issued
in late Summer 2012, followed by a Pre-Bid Conference. After initial offers are received, VA will conduct both price and technical evaluations on the offers. Lease
award is anticipated in Spring 2013. Building design and construction is estimated
to be complete in Spring 2015 with HCC activation to follow.
Prepared April 2012
Office of Construction and Facilities Management
Butler, PA
Health Care Center (HCC)
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Discussion: An advertisement was posted in FedBizOpps on June 23, 2010, and
a market survey was held on July 20, 2010. Several qualified sites were identified
to compete. After preparing the schematic design and Solicitation for Offers (SFO),
the SFO was released on October 21, 2011, and a pre-bid conference was held shortly thereafter at the Butler VAMC. The SFO will be used to procure a developer who
construct the clinic and then lease it back to VA for 20 years. Initial offers were
received and evaluated in January 2012. A second round of offers was received and
evaluated in March 2012.
Next Steps: Lease award is anticipated in late Spring 2012. Building design and
construction is estimated to be complete in Spring 2014 with HCC activation to follow.
Office of Construction & Facilities Management
April 2012
The CHAIRMAN. I appreciate that. But
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And I appreciate the accolades for Mr. Neary, but you cannot tell
me over two years you could not find somebody that did, in fact,
fill the qualifications for the directors position.
Mr. HAGGSTROM. You are absolutely correct, sir. This was a conscious decision on my part to allow Mr. Neary to continue to serve
in this capacity for this period of time.
The CHAIRMAN. And the reason was?
Mr. HAGGSTROM. The reason was is I felt he was doing a very
good job.
The CHAIRMAN. Even though he does not meet the qualifications?
Mr. HAGGSTROM. He does not have a degree of that requirement
and the fact that we were going through a formal organizational
change that needed to be approved and I wanted to make sure that
was approved before we move forward.
The CHAIRMAN. Probably could have gotten a certification in the
two years that he has been acting. He could have gone to school
and gotten it.
Mr. HAGGSTROM. I will defer to Mr. Neary on that.
The CHAIRMAN. Dr. Roe.
Mr. ROE. Thank you. Just a couple of questions, Mr. Chairman.
Thank you.
Do you all believe you have a competent contractor? Does VA believe that they have a contract with a competent contracting firm?
Mr. HAGGSTROM. Mr. Roe, I absolutely do. Brasfield & Gorries
credentials in constructing health care facilities are second to none.
They are an extremely large, well-represented firm in the southeast in constructing health care facilities. I believe they are constructing facilities in other parts of Orlando.
Mr. ROE. I think they have been in business for 48 years. They
would not be there if they were not competent, I think.
And, secondly, then, how do you explain their delays? Are you
laying the blame on them for this because, I mean, I read through
this? I have never seen anything like this in my 30 years of being
around multi-hundreds of millions of dollars worth of construction.
And the reason the private sector cannot get away with this is
we lose capital. We run out of money. The banks will not lend you
any more money and you just have to stop. So you do not run
across these things. You make sure.
And the comment that the delays are because you are going to
get the newest technology, well, then you would never buy an iPad
because you never have the newest technology. You always got
iPad two and three and four and whatever is coming up.
So, I mean, design a hospital, this is not new. We design hospitals all the time in this country. And I cannot see how that would
have held it up if you would have had a solid set of documents to
start with so a contractor could look in there and bid that project
with some profit in there and get it done on time. I have seen it
done time after time after time.
How do you explain the delay? Is it the contractor or is it
Mr. HAGGSTROM. I am not placing the blame on Brasfield &
Gorrie at all. We fully recognize that we did have problems in our
design and the delay in
Mr. ROE. Why would that be, though, whenbecause I helped
design hospitals. This is not my maiden voyage. And you sit down.
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Mrs. ADAMS. What about a cost risk analysis for all major construction projects? These are all three that the 2009 GAO report
suggested that you make. So you are now doing them. Is that also
applied to the Orlando VA clinic?
Mr. NEARY. It probably does not apply because of the situation
we are in.
Mrs. ADAMS. Because of the delays and the different drawings,
the multiple drawings?
Mr. NEARY. Pardon me?
Mrs. ADAMS. Because of the multiple drawings over and over
again?
Mr. NEARY. We are doing risk analysis both in terms of schedule
and cost in Orlando. The General Accounting Office recommendation was that at the outset and periodically through the entire life
of a project we assess the risks associated with those two and we
are implementing those across the enterprise.
Mrs. ADAMS. Okay. So, Dr. Petzel, just to recap, we have two separate Federal laws regarding VA construction projects that you are
not complying with.
Next we have a GAO report that you are using under-qualified
people to do analysis on these projects which are recommended,
three major changes in VA which you say you have started to implement, but, to my knowledge from me listening today, they have
not been given to this Committee.
And then, finally, I have about 300,000 veterans in the central
Florida area that are paying every single day for the VAs incompetence.
So tell us why VA is choosing to ignore Federal law and Congress
and who should I hold responsible for the gross mismanagement of
the Orlando VA facility?
Dr. PETZEL. The responsibility for the Orlando VA hospital rests
with us and with the Federal Government. There is from my perspective no single individual that you could, as you wish, blame for
what has happened.
Mrs. ADAMS. Well, I just want to leave you with one thing. Our
veterans deserve the care and they need this facility to come online. They have served our country well. They deserve this care.
And I look forward to hearing more about your agency getting
this facility back on track and completed as quickly as possible for
their benefit, our veterans benefit.
Thank you, and I yield back.
The CHAIRMAN. Ms. Brown.
Ms. BROWN. I would like to be associated with the remarks of the
young lady from Florida, Ms. Adams.
But in addition to that, let me just say that the construction industry is down. I do not understand why we are not getting a better bang for our buck right now because so many peopleI mean,
the industry is down. So it is lots of people that want to do work
and will give us a good, you know, cost for the dollar.
Have we been able to benefit in the VA from this?
Mr. HAGGSTROM. In terms of the pricing in the industry, I believe
VA has benefited from this.
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A P P E N D I X
Prepared Statement of Chairman Jeff Miller
Good morning, and welcome to todays Full Committee hearing From the Ground
Up: Assessing Ongoing Delays in VA Major Construction.
Before we begin, I would like to ask unanimous consent for our colleagues from
Florida, John Mica, Sandy Adams, and Daniel Webster to sit at the dais and participate in todays proceedings.
I would also like to ask unanimous consent that a statement from Charles
Boustany, our colleague from Louisiana, be entered into the record.
Hearing no objection, so ordered.
Thank you all for joining us.
We are here this morning to examine the status of on-going Department of Veterans Affairs (VA) major construction projects and leases and to assess management
and oversight issues which have led to significant setbacks in recent projects.
The VAs FY2013 Budget Submission shows that four major medical facility
projects in Denver, Las Vegas, New Orleans, and Orlando have experienced significant cost increases and schedule delays from the original authorization.
Although, all of these projects were authorized between fiscal years 2004 and
2006, none are open for business today.
Additionally, there are 55 major medical facility leases that have been authorized
in recent years with a total start-up cost of $442 million.
However, only five of those facilities are now open. Thirty-eight are behind schedule, with fourteen of these falling three or more years behind their intended target.
As the VA health care system has grown, it appears that we have come to a point
in VAs major construction program where the administrative structure is an obstacle that is not effectively supporting the mission.
As a result, our veterans are the ones who are left without services and our taxpayers are the ones left holding the check.
A case in point, on October 24, 2008, VA broke ground to build a new medical
center in Orlando, Florida with a scheduled completion date of October 12, 2012.
Yet, this past December, I learned of serious and significant issues surrounding
the construction of this new facility to better care for our veterans. It was not the
VA, but the contractor who came to me out of frustration.
When VA confirmed a few days later that the project was indeed going to be delayed, I quickly scheduled a visit to Orlando to see the situation for myself.
Needless to say, what I saw was a startling and unacceptable disconnect between
what VA Central Office was telling me about the extent of the delay and the dayto-day reality on the ground.
Clearly, there are problems with the design, procurement of specific medical
equipment, change orders and how they all fit together.
The issue of pointing fingers has to stop.
We cannot and must not allow the problems in Orlando, or elsewhere, to persist.
It is vital that reputable, long-standing companies want to work with VA on these
significant flagship projects that are so important to the delivery of care.
Todays plans and projects are tomorrows hospitals and clinics, andwhether it
is by building the new, renovating the old, or leasing the existingour allegiance
must always be to the veterans who rely on VA to provide the benefits and services
they need to lead healthy, productive lives.
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Prepared Statement of Hon. Bob Filner,
Ranking Democratic Member
Good morning everyone. Thank you for attending and for your continued interest
in veterans issues. I also want to thank you Mr. Chairman for focusing the Com(53)
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mittee on the critical issue of the VA construction program. It is clear to me that
the Department needs to shore up their process of managing the construction and
completion of significant projects that are important to every single person on this
Committee.
At issue today is an all too familiar theme of these oversight hearings - lack of
management, control, accountability and oversight. I would say that most of the
problems that have been encountered during the construction of the facilities we are
looking at today could have been avoided with proper management and vigilant
project oversight. Let me just take Denver, for example, a facility that received appropriated funds as far back as Fiscal Year 2004. As of November 2011 VA announced that the target completion date for this hospital is 2015 11 years after
first receiving funds and an increase of at least 29 percent in the cost and it isnt
even built yet.
Denver is not alone. The Las Vegas facility has increased in cost from the original
estimate by at least 110 percent; Orlando 89 percent, and New Orleans, 45 percent.
These increases represent over a billion dollars in funding.
Too often we hear of cost increases such as those I have just discussed, delayed
or suspended construction activities, inadequate design plans and very little communication between VA and its partners. Communication that I understand would
have helped to clear up some misunderstandings at certain construction sites such
as Orlando.
It is hard for me to believe that VA would refuse to meet with contracting officials
concerning any construction project much less one that is behind schedule and beset
with problems, yet that is what I am being told.
VAs testimony points to the fact that it has been 18 years since they have built
a medical center. That may be true, but it does not excuse poor management and
basic oversight responsibilities.
I would like to hear more detail from Dr. Petzel on the integration of risk management into the core project management functions. I believe this was one of two
recommendations from the Government and Accountability Offices December 2009
report on project cost estimations.
I am sure everyone would agree that we have to do better than this. We expect
better than this, veterans deserve better than this and I hope todays hearing will
help shed light on the barriers and challenges that VA faces during the construction
process.
As we move forward, I look forward to working with VA on improving the construction program and ensuring more transparency and efficiency in the process.
Thank you.
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Prepared Statement of Hon. Corrine Brown
Thank you, Chairman Miller and Ranking Member Filner, for calling this hearing
today.
Central Florida has waited for over 25 years for the VA to build a VA Medical
Center.
I am ecstatic the VA Medical Center will be co-located with the new University
of Central Florida medical school and near an urban medical complex. The new center, along with the Burnham Institute, will create a biotech cluster at Lake Nona,
allowing the area to become one in which doctors and researchers can work together
on the needs of our area veterans. It is known that teaching hospitals provide the
best health care available, which is invaluable for the VA and Central Floridas veterans.
25 years is too long for those men and women who have defended this country
and the freedoms it holds dear. Too long for the oldest veteran population to wait
for proper care.
When Jesse Brown was the Secretary of the VA under President Clinton, he visited Orlando and I convinced him that he needed to keep the hospital at the base
for the VA. I hope we can keep that clinic to augment the services here at the Medical Center.
However, that clinic was never adequate to serve the veteran population of the
Central Florida region.
In 2009, Chairman Filner held a field hearing in Orlando where Mr. Robert
Neary, who is with us here today and the Orlando VA Medical Center Director,
Timothy W. Liezert, testified. It was a wonderful hearing and everyone was very
pleased that this Medical Center was finally moving forward. Everyone was con-
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fident that this facility will be the feather in the cap of the VA as an example of
the positive moves the VA has been making to put our veterans first.
Then the reports began of problems at the worksite, with the workers and the
roof.
I have spoken to Secretary Shinseki and have been assured that the problems
have been fixed.
And yet here we are. Do not be mistaken, this is a political hearing. I have never
been involved in a hearing where we are discussing one project. It is time for the
VA to get to work and build this Medical Center.
I do not want to have to wait another one, three or any number of years for this
Medical Center to open. I want it open now.
I look forward to hearing your testimony.
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Prepared Statement of Hon. Silvestre Reyes
Thank you Chairman Miller for convening this important hearing. One of the
most critical functions of this Committee is to ensure that we provide the necessary oversight of the Department of Veterans Affairs major construction
projects. Oversight is crucial especially during times when we must be financially prudent, while at the same time ensuring our veterans are able to access
the facilities they deserve.
Today, I am particularly interested in hearing how the Department will deal
with the issue of long range planning and management in regard to its major
construction projects that have been authorized and appropriated, but yet
timelines are not being met and additional funds were requested.
Since 2004, the VA has received appropriations for 86 major construction
projects. However, of the 86 projects, only 32 are complete; 30 are under construction; 20 are under design; and 4 are in the planning stages. I am interested in hearing from VA if there is a time line and integrated master schedule
for these projects and what is the current total cost for the 86 major construction projects.
Each of the four locations being highlighted today; Las Vegas, Orlando, New Orleans, and Denver all experienced some degree of delays in scheduling and all
have increased in cost since the initial estimate. Those that pay the price are
our veterans who rely on the VA for their medical needs.
It is imperative that we meet the needs of our nations veterans and this requires effective long range planning that reflects fiscal responsibility. Had these
delays and/or extensions been prevented, the Department could have spent the
funds providing more benefits and services to veterans. The Department must
improve its management of these major construction projects to ensure that
they are completed on time and within the allotted budget. We fail to help our
veterans when these projects meant to assist them are delayed in their dates
of completion.
Thank you
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Prepared Statement of Hon. Charles Boustany, Jr., M.D.
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from the date of award. We anticipate the opening of the Lake Charles CBOC to
patient care in July 2012.
In addition, on March 9, 2010, the following bi-monthly status update from Director Specks stated in regard to the Lafayette CBOC, A Technical Evaluation Board
(TEB) was established to review the proposals received in response to the solicitation for offer (SFO). The TEB is responsible for evaluating and ranking the proposals based on the evaluation criteria in the SFO.
The TEB will prepare a report with the decision/final evaluation and selection of
offeror. The decision has been made and the offeror selected will be notified on or
about June 3, 2011 and the negotiations between the parties (the VAMC and selected offeror) will commence at that time. It is expected that negotiations will take
3060 calendar days to complete.
On March 26, 2010, after noticeable delays in the solicitation process for both the
Lafayette and Lake Charles CBOCs, I called VA Central Office Real Property Service officials into my office for an explanation. The meeting was productive and I received a commitment from the VA Real Property Services that the CBOCs in my
district were a high priority and would be followed with a close eye from VA Secretary Eric Shinseki.
However, almost two years later on March 7, 2012, I received an update from Director Specks stating, Regrettably during the legal review of the Lake Charles
CBOC lease package, it was determined that there were significant errors in the
Solicitation For Offers (SFO). This same SFO was used for the Lafayette CBOC as
well. Making matters worse, these errors reportedly happened because VA officials completed the wrong form at the start of the process.
Director Specks continues, These issues have necessitated the cancellation of
both SFOs for Lake Charles and Lafayette CBOCs and a re-announcement of a revised SFO for both clinics. In order to avoid the same issues with the revised SFOs,
VA Central Offices Real Property Service will be responsible for the SFOs and subsequent contracting process and execution of the lease. As a result, there will be further delays associated with the opening of the Lake Charles and Lafayette CBOCs.
Real Property Service has indicated that it may take a minimum of 12 months to
complete the procurement process. According to the VAs own estimated time and
errors, it will be at least three years until the opening of the clinics from the time
VA Real Property Service pledged to me to carefully guide and expedite the process
and when the doors will open at each clinic.
It is time for VA upper management to fully explain why it allowed this to happen. With so much at stake for veterans, why didnt the VA require its employees
to double check for their own errors long before they submitted a completed proposal
to VA attorneys for final approval? I suspect Lake Charles and Lafayette arent isolated examples, and that they are a symptom of larger management problems with
the VA. Congress should demand more transparency and accountability.
VA officials claim they will try to expedite the new solicitation for offers. However,
Louisiana veterans deserve specifics from the VA Secretary not more empty assurances and bureaucratic jargon. I hope this Committee will press the VA Secretary
to explain plans to speed the construction of promised clinics and to tell us how he
will prevent this avoidable error from affecting any veteran in the future.
The Committee should use this unique opportunity to make the changes that need
to be made now so that future solicitations for veterans facilities will not be compromised at the expense of those who fought for our freedom.
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f
Prepared Statement of Miller Gorrie
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near complete. We were not able to manage a workforce on the job efficiently as we
had limited space to work; also, the work was suspended in major areas to allow
for design completion.
In early January we requested a meeting with the highest levels of authority at
the VA to ensure the facts of the project were heard. As a result, on January 19,
2012, one of the Executive Directors of the VA issued a directive to the designers
to complete the design by February 29, 2012. The designers accelerated the design
process, so between January 19 and March 19, 2012, we received over 50 RFPs (requests for proposal) that contained over 950 new or revised drawings. According to
the VA, the documents released on March 19th were supposed to be the last of the
required design documents, but it is not.
After waiting 18 months to complete the project design, the VA is pressuring us
to proceed. We have thousands of drawings to check for revisions. After the review,
the new materials and equipment shown on the drawings must be purchased, shop
drawings checked and deliveries scheduled. These activities, which have already
been completed once before, will require some time (8 to 12 weeks) to complete properly. Also, the cost and time impacts of this added work will have to be settled.
The problems on this job are unprecedented in our companys forty-eight year history. These problems are different from anything that we have experienced on any
jobs that we have constructed, including the first two packages of the Orlando VA
project. On the hospital and clinic project, we were supposed to have completed documents to build by in August 2010; however, the drawings for this project were incomplete and under major revision until last week, March 19, 2012.
The VAs process for resolving the changes, both time and money, has not been
timely and must be corrected and improved. Our company and our subcontractors
cannot be responsible for funding this project for the VA which is what is currently
happening.
The exact amount of the time and money needed to resolve these issues has not
been determined, but it is significant.
We need resolution of the above issue to avoid further cost and time impacts and
to avoid irrevocable harm to contractors working on the hospital & clinic.
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Prepared Statement of John P. OKeefe
Chairman Miller, Ranking Member Filner, Members of the Committee, My name
is John OKeefe and I am the President of the National Group for Clark Construction Group, LLC. I would like to thank the Committee for the opportunity to address two Veterans Administration (VA) hospital construction projects, the VA Hospital in Las Vegas, Nevada and the VA hospital in New Orleans, Louisiana.
Clark/Hunt Collaboration
In 2008, the Department of Veterans Affairs selected the joint venture of the
Clark Construction Group and the Hunt Construction Group to construct the new
Medical Center in Las Vegas, Nevada. The Clark/Hunt team has over thirty years
of experience working together to deliver a number of successful projects for our clients.
Clark Construction Group, LLC, founded in 1906, is today one of the nations most
experienced and respected providers of construction services, with $4 billion in annual revenue and major projects throughout the United States. In 2011, we ranked
ninth in the United States on the Engineering News Record Top 400 list.
Clark Construction performs a full range of construction services throughout the
United States from small interior renovations to some of the most visible architectural landmarks in the country. Some notable completed projects include Walter
Reed Medical Center in Washington DC, and the San Antonio Military Medical Center in San Antonio, Texas. The foundation of all of our construction work is a solid
relationship with both public and private clients who have the confidence to rely,
time and again, on our experience, and in-house expertise to make their vision a
reality.
We approach each project with a cooperative mindset, working with clients, architects, subcontractors and the community toward the common goal - successful
project delivery. Our diverse construction portfolio and specialized divisions and
subsidiaries ensure that each project is matched with appropriate resources and expertise. Through technical skill, pre-construction know-how and self-performance capability, we anticipate project challenges, develop solutions that meet clients objectives and ultimately deliver award-winning projects. In this way, our work today
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continues to meet the stringent standards of safety, quality and integrity, which
have been the Companys core values since its founding.
Hunt Construction Group (Hunt), another of the countrys largest construction
companies, has been in business for over sixty-six years and is headquartered in
Scottsdale, Arizona. Hunt was built on a simple, yet powerful philosophy, do the
job right. This philosophy has proven to be Hunts lasting foundation. With over
$1.7 billion in revenues, in 2011 Hunt ranked twenty seventh in the United States
on Engineering News Records Top 400 list.
Strong client relationships are as important to Hunt as Hunts construction expertise. Both are needed to get the job done on time, in a cooperative manner, and in
a way that meets the clients needs. Hunt and their clients understand that at the
end of the day they want the same thing, something both the client and Hunt are
proud to put their names on.
Hunts portfolio encompasses nearly every type of project. Significant projects include the San Antonio Military Medical Center hospital in San Antonio, Texas, and
other health care facilities, as well as a variety of stadiums, government buildings,
infrastructure and other significant projects throughout the United States.
VA Medical Center, Las Vegas Nevada
The Las Vegas VA Medical Center Project was awarded to Clark/Hunt, a Joint
Venture in September 2008, and the notice to proceed was issued on October 22,
2008. The original contract completion date was August 22, 2011, and due to time
extensions granted for changes to the project, the contract completion date was extended to December 12, 2011. The project was completed on time. The VA has begun
their activation of the project including installation of medical equipment, training
and maintenance of facilities. The VA has informed us that the Las Vegas VA Medical Center will begin treating patients by mid-summer of this year.
With the original contract work now complete, we are in the final stages of the
punchlist and commissioning. Clark/Hunt also received a change to modify the Mental Health Ward to accommodate revisions to the VA Design Guide issued after the
September 2008 contract award. This work is well underway and scheduled to be
completed next month. These revisions will not affect activation or occupancy.
The VA Medical Center in Las Vegas maintained the schedule throughout the
project including adjustments for modifications requested by the Veterans Administration. On this project, Clark/Hunt and the VA had an outstanding relationship.
Our relationship and the open communication between Clark/Hunt and the VA
proved critical in making this Project a success. Working through the VA Medical
Centers liaison, we were able to actively coordinate the early stages of occupancy
including services provided by their independent suppliers and the delivery of materials and equipment for activation. We believe that this project was a great success
for both Clark/Hunt and the VA.
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struction projects. With each project, McCarthy focuses on serving our military and
Federal clients by bringing state-of-the-art construction innovation to each project.
The Clark McCarthy joint venture has successfully provided construction services
since 2002. In the past 10 years, the two firms have realized a total of nine projects
completed or underway together, representing over $4.5 billion in construction
value. In addition to the New Orleans VA Replacement Hospital, Clark McCarthy
is also building the Marine Corps, Camp Pendleton Replacement Hospital in Oceanside, California, the Stanford University Medical Center Adult Replacement Hospital in Palo Alto, California, and the California Department of Corrections and Rehabilitation/California Prison Health Care Services Health Care Facility in Stockton, California.
In short, the Clark/McCarthy joint venture is a proven, integrated team whose
systems, protocols and most importantly relationships and culture have been
successfully merged delivering outstanding results for clients and partners.
Southeast Louisiana Veterans Healthcare System Replacement Hospital,
New Orleans, Louisiana
The Joint Venture of Clark McCarthy Healthcare Partners proposed on the Southeast Louisiana Veterans Healthcare System Replacement Hospital and received notice of award on October 1, 2009. The contract utilizes an Incentive Price Revision
Successive Targets Contract, using a Target Price and a Ceiling Price approach to
manage costs. Almost immediately upon award, but prior to a notice to proceed, the
project was protested to the U.S. Government Accountability Office by one of the
other proposers. While the protest was ultimately denied, it delayed the Notice To
Proceed and the start of the preconstruction services until February 11, 2010.
We mobilized in New Orleans and the preconstruction services began in February
2010 immediately upon receipt of the Notice to Proceed. In addition to contractually
required deliverables, Clark McCarthy worked closely with the design team, the VA
Construction and Facilities Management Office and the VA Medical Center staff to
manage and reduce overall project cost, expedite procurement activities, and mitigate the impact of the time lost during the protest.
Originally it was contemplated that the preconstruction services would run concurrently with the first phases of construction. Because of the protest and further
design development, preconstruction services were extended by approximately one
year through mutual agreement between Clark McCarthy and the VA. The start of
the first phase of construction was further delayed, as there were problems related
to the land acquisition by the VA. The Pan American Life Building, originally slated
to be turned over to the VA by the City of New Orleans in November of 2010, was
not in the VAs possession until August of 2011. In an effort to reduce the impacts
of the time lost, Clark McCarthy worked closely with the VA to develop an early
demolition and abatement package for the Pan Am building. We received Notice to
Proceed with this work on September 30, 2011. The early package was critical in
ensuring that the Pan American Life insurance building could be renovated and
turned over early for VA Medical Center administrative offices. The remaining property was originally scheduled to be available for construction in April of 2010, but
was delayed until July 2011. During that time period, Clark McCarthy worked with
the team to obtain final designs for the first phases of the earthwork, allowing Clark
McCarthy to procure the work prior to the states completion of the property turnover. The delays caused by the property turnover, along with the continual refinement of the design necessitated that the preconstruction effort would continue
through the end of 2011. The VA was able to provide Clark McCarthy with a Notice
to Proceed on the first phases of earthwork on May 12, 2011.
During the final phases of the property turnover, and after the original Notice to
Proceed for the earthwork was issued, the Louisiana State Historical Preservation
Office began to investigate the cleared site to determine if any items of historical
significance were discovered on the property. Work at the site was suspended after
articles of historic significance were located. The archeological investigation began
in July 2011 and continued until December 2011. During the investigation contaminated soils and underground storage tanks were also identified. While largely concurrent, these discoveries, not unusual to large urban sites, were dealt with in cooperation between Clark McCarthy, the VA, their consultants and the Louisiana Department of Environmental Quality. The property, once free of encumbrances, was
fully released to Clark McCarthy for construction commencement on February 12,
2012, and work resumed on February 22, 2012. Our team was able to quickly mobilize and begin work on the site due to the preplanning and coordination between
Clark McCarthy and the VA, which helped mitigate further delays. As of this date
work is underway and moving along in accordance with our plan and schedule.
Completion of the project is planned to occur in 2016.
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The Clark McCarthy team and the VA are determined to complete our work as
quickly as possible while maintaining our stringent standards for safety, quality and
integrity. To ensure a timely completion of this important project, cooperation, coordination, and effort will be required from all parties.
I want to thank you for this opportunity to testify today and would welcome any
questions you may have.
Thank you.
RELEVANT FEDERAL PROJECTS AWARDED DURING FEDERAL FISCAL
YEARS 2010, 2011, OR 2012
The following Federal contracts were awarded within Federal fiscal years 2010,
2011, or 2012, and are relevant to the subject matter of the testimony:
Southeast Louisiana Veterans Healthcare System Replacement Hospital, New Orleans, LA
Agency: Department of Veterans Affairs
Contract No. VA10109RP0123
Contract Award Date: September 30, 2009
Initial Contract Award Amount: $3,319,000
Entity: Clark/McCarthy Healthcare Partners, a Joint Venture
Camp Pendleton Naval Hospital, Marine Corps Base Camp Pendleton, CA
Agency: Department of the Navy, Naval Facilities Engineering Command
Southwest
Contract No. N6247310R-0001
Contract Award Date: September 1, 2010
Initial Contract Award Amount: $393,883,000
Entity: Clark/McCarthy, A Joint Venture
Co-Generation Energy System, VA Medical Center, Dallas, TX
Agency: Department of Veterans Affairs
Contract No. VA701C-0171
Contract Award Date: September 14, 2011
Initial Contract Award Amount: $22,865,715
Entity: McCarthy Building Companies, Inc.
f
Prepared Statement of Robert A. Petzel, M.D.
Chairman Miller and Ranking Member Filner thank you for the opportunity to
testify on the status of the Department of Veterans Affairs (VA) major construction
and leasing programs, as well as the management and oversight of major construction project design, construction, and activation. Accompanying me today is Glenn
Haggstrom, Principal Executive Director, Office of Acquisition, Logistics and Construction.
I will begin my testimony with a description of the scope of our construction programs and some of the challenges inherent in this or any major construction effort
by a large organization. I will then lay out several of the actions we have taken to
address these challenges, to put projects that have fallen behind schedule back on
track, and to make sure that these same problems dont hinder our efforts in the
future.
Construction
The goal of VAs construction and leasing programs is to ensure that there are
appropriate facilities to provide benefits and services to our Nations veterans. With
the support of the Congress, VA is engaged in one of the most significant capital
improvement programs in our history, and overall, we are succeeding. Candidly, we
have experienced challenges in managing our complicated, new medical projects;
partly because it has been 18 years since the last VA hospital was built and activated. But, we have identified the issues, are taking steps to mitigate them, and
using them as learning opportunities to avoid making the same mistakes again.
Since 2004, VA has received appropriations for 86 major construction projects,
that is, those projects with costs of over $10 million. These include various types
of projects, such as: outpatient clinics; spinal cord injury centers; community living
centers; polytrauma centers; seismic safety corrections; and most notably four large,
full-service inpatient hospital facilities in Las Vegas, Nevada; Orlando, Florida; New
Orleans, Louisiana; and Denver, Colorado. Of the 86 projects, 32 are complete; 30
are under construction; 20 are under design; and 4 are in the planning stages.
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Hospital Projects
Four major hospital projects are currently in different stages of construction. In
Las Vegas, Nevada, we are in the process of accepting the recently completed construction of the new medical center. The facility consists of 90 inpatient beds, a 120bed community living center, primary and specialty care, surgery, mental health, rehabilitation, geriatrics and extended care. VA will begin serving Veterans at the Las
Vegas facility this summer, and expects to serve more than 61,000 Veteran enrollees.
The Orlando project includes 134 inpatient beds, an outpatient clinic, a 120-bed
community living center, a 60 bed domiciliary, parking garages and support facilities all located on a new site. While phases of the project have been completed or
are nearing completion, it is the construction of the final phaseof the clinic, diagnostic, treatment and inpatient facilitiesthat will delay the opening of the new
medical center. Three primary factors are contributing to the delays: errors and
omissions in the original design; equipment coordination and design issues; and contractor performance. Errors in the initial design along with procuring and integrating specialized medical equipment into the existing design, both VA responsibilities, affected the contractors schedule. This resulted in inefficiencies and delays
that contributed to the extension of the original contract completion date. Construction quality and manpower issues have also significantly affected the project
timeline. VA believes that the project can be completed in the summer of 2013, and
expects to serve nearly 113,000 Veteran enrollees. We are working with the contractor to determine a completion date.
The new 1.5 million square foot facility in New Orleans, Louisiana, will accommodate the Southeast Louisiana Healthcare Systems needs for primary care, mental
health, and specialty care. The project includes 200 beds, an outpatient clinic, and
research facilities along with support infrastructure. This project has experienced
delays as the City of New Orleans and State of Louisiana acquired the sites property under a Memorandum of Understanding between the City and VA. Additionally, VA has had to remediate environmental issues on the site, which the City of
New Orleans had agreed to remedy prior to the transfer of the property. This has
required additional time not originally built into the schedule. VA now has title to
the site with the exception of one parcel, which includes a historic property. While
VA is working with the City to acquire this final piece of land, we are not delaying
the project. Construction has already begun; the project is scheduled for completion
in spring 2015, with the goal of serving more than 130,000 Veteran enrollees starting in the fall of 2015.
The Denver replacement hospital is a 182-bed full service tertiary care medical
center that includes a spinal injury/disorder center, community living center, research building, central energy plant and parking structures, as well as inpatient
and outpatient services. Construction of the new facility recently began, and it is
expected to be completed in the spring of 2015. The new Denver facility will begin
serving its more than 119,000 Veteran enrollees in the fall of 2015.
In addition to construction, the leasing of medical clinics is essential to providing
Veterans access to state-of-the-art health care services. Leasing provides VA an additional tool and increased flexibility to serve our Nations Veterans with both the
space and timely services closer to where Veterans live. Since 2008, VA has opened
180 leased medical facilities, 50 of which are major facilities, or those with an annual rent exceeding one million dollars. VA currently leases approximately 13.4 million square feet in support of its health care system.
VAs Way-Forward
To date, VA has taken several steps to improve the management and oversight
of major hospital construction projects. Several organizations within the Department
have responsibility for various elements of construction, which include defining facility requirements, budgeting and strategic capital investment planning, authorization and appropriation, design and construction procurement and oversight, specialized equipment procurement and facility activation. Historically, one office has not
been identified as the accountable organization for major construction projects
from beginning to end. This has led to difficulties with communication and shortfalls
in project oversight. To address these issues going forward, the Secretary has designated the Office of Acquisition, Logistics and Construction as the single point of
project accountability within the Department.
VA has learned that we do not have enough site engineers to properly oversee our
current volume of major construction efforts. Therefore, in Fiscal Year (FY) 2012,
VA is hiring approximately 30 additional on-the-ground, site engineers who are
needed to properly manage and oversee our ongoing major construction projects,
bringing the total number of VA site engineers up to 190. Congress recently appro-
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priated the funding for these engineers in the Major Construction and Medical Facilities accounts. VA is also integrating risk management into the core project management functions. This will help identify potential cost and schedule impacts at an
earlier point in time so that issues can be mitigated sooner and/or managed better.
In the Veteran Health Administration (VHA) an oversight board has been enhanced,
which will now be the central, key strategic communication path for risk management issues, and which will enable VHA leadership to act at an earlier point in
time. VA is augmenting project reporting based on experiences from the large
projects discussed above to improve performance within VAs construction program,
including medical equipment procurement.
Finally, with the submission of the FY 2012 budget, VA began implementing a
new, Department-wide planning process, called the Strategic Capital Investment
Planning Process (SCIP), to prioritize the Departments future capital investment
needs. With SCIP, VA develops an annual, single, integrated prioritized list of proposed projects covering all capital investment programs (major construction, minor
construction, leases and VHA non-recurring maintenance (NRM)). SCIP is designed
to enable VA to strategically target its limited resources to most effectively improve
the delivery of services and benefits to Veterans, their families and survivors by addressing VAs most critical needs and performance gaps and investing wisely in VAs
future.
Conclusion
VA has a strong history of learning from past experiences and adapting our approaches when necessary to accomplish its mission to serve Veterans. The lessons
learned from our recent construction challenges will lead to improvements in the
management and execution of our capital program as we move forward. We are committed to meeting VAs responsibility to design and build quality facilities that provide care and services to our nations Veterans. I look forward to answering any
questions the Committee has regarding these issues.
f
Question For The Record
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that could be mitigated the Secretary of Veterans Affairs should direct the Office
of Construction and Facility Management (CFM) to:
a. Require the use of an integrated master schedule for all major construction
projects. This schedule should integrate all phases of project design and construction.
b. Conduct a schedule risk analysis, when appropriate, based on the projects cost,
schedule, complexity, or other factors. Such a risk analysis should include a determination of the largest risks to the project, a plan for mitigating those risks,
and an estimate of when the project will be finished if the risks are not mitigated.
Has this been done and if so, when was it implemented?
How do you plan to manage these recommendations and ensure that they are
being followed?
2. I have been informed that we have asked for copies of the letters of intent to
exceed 10 percent of the authorized amount for Orlando, Las Vegas and New Orleans that are referenced in the FY 2013 budget submission. It is my understanding
that the budget submission reflects that VA has sent these letters to the Committees in November 2011. Please provide these letters to the Committee. Thank you.
3. In testimony, Brasfield and Gorrie state that the Senior Contracting Officer refused to meet with them in August, 2011. Is this true? If it is true, what would be
the reasoning for refusing to meet with the contractors on a project that is already
behind and beset with problems?
4. What is the exact amount of appropriations VA has received for the 86 major
construction projects you reference in your testimony?
5. In the spirit of transparency, please provide the Committee a spread sheet on
the 86 major construction projects, authorizations for those projects, appropriations
for those projects and any bid savings, carry over funding, or supplemental funding
that is being applied to those projects.
6. As an agency, do you believe the lease process is one that is advantageous to
assist in fulfilling your mission? If you could change the lease program, what would
it look like?
7. With regard to Orlando, please explain to me what happened between the hearing in April 2009 and the beginning of the problem in the spring of 2011. What
problems and lack of communication contributed to the delay? What is being done
now to make sure this does not happen again?
8. I was concerned with the lack of communication when it was determined the
Orlando VA Medical Center was going to be delayed. The VA Central Office did not
notify me or my staff of this development. My district staff was notified by a public
relations staff member who then asked up here if that was the case.
9. My concern is that VA Central Office did not have sufficient oversight of the
Orlando project and if they had, the delays and lack of communication could have
been avoided. What are your thoughts regarding communication between the Central Office and regional efforts considering what we have discussed here today?
10. You know Fort Bliss is growing by tens of thousands of troops, and soldiers
are leaving military service and more and more they will be staying El Paso. Our
local veteran population is growing and will probably increase at a much faster rate
than anywhere else in the country in the coming years. The Army is constructing
a new medical center to replace the existing facility which is currently a joint DoD
VA facility. The VA will need to make a decision about how to deal with this increased veteran population and with the need to expand their existing facility or
move to a new location. I believe that the best location for a new VA hospital in
El Paso is co-located with the Texas Tech Medical School on the campus of the Medical Center of the Americas. This would give the VA access to top notch research
and clinic assets - proving cutting edge care to veterans by partnering with the medical school and others. How is the VA planning for new facilities in areas like El
Paso that are seeing major growth?
Responses to Bob Filner, Ranking Democratic Member from Hon. Eric K.
Shinseki, Secretary, U.S. Department of Veterans Affairs
Question 1: The Government Accountability Offices Report of December 2009 entitled The VA Is Working to Improve Initial Project Cost Estimates, but Should Ana-
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lyze Cost and Schedule Risks, recommended that in order to provide a realistic estimate of when a construction project may be completed as well as the risks to the
project that could be mitigated the Secretary of Veterans Affairs should direct the
Office of Construction and Facility Management (CFM) to:
a. Require the use of an integrated master schedule for all major construction
projects. This schedule should integrate all phases of project design and construction.
b. Conduct a schedule risk analysis, when appropriate, based on the projects cost,
schedule, complexity, or other factors. Such a risk analysis should include a determination of the largest risks to the project, a plan for mitigating those risks,
and an estimate of when the project will be finished if the risks are not mitigated.
Has this been done and if so, when was it implemented? How do you plan to manage these recommendations and ensure that they are being followed?
VA Response: The Office of Construction and Facilities Management (CFM) accepted the findings in early 2010 and proceeded to study the issue and develop a
plan for implementing the findings on Integrated Master Scheduling and Cost Risk
Analysis. CFM studied other agencies to learn from their implementation of Integrated Master Schedules (IMS) and Risk Analysis. VA issued guidance to modify architect/engineer (A/E) contracts to include submission of a cost loaded design schedule along with a construction cost risk analysis in August 2010. CFM changed the
requirements in VAs Program Guide 1815, A/E Design Submissions Requirements,
in October 2010 to formally include the requirement for schedule and cost analysis
as deliverables under the A/E contract.
A memorandum dated March 30, 2012 (Attachment A), was issued to all CFM
Regional Directors and Project Managers requiring the development of a complete
IMS for all projects that obtained initial funding in fiscal years (FY) 2011 or 2012.
Schedules contain planning activities and milestones for procurement, design, construction, medical equipment procurement, and activation. The Project Managers
completed the schedules requested at the end of June 2012. Those projects that received funding in a prior year have truncated schedules based on where they are
in the planning, design or construction process. This requirement applies to all future projects. CFM has started to analyze the schedules to identify risk areas and
develop mitigation plans. The memorandum of March 30, 2012, also required that
a project cost risk analysis be conducted for all projects in the FY 2012 and FY 2013
budgets. CFMs Cost Estimating Service conducted the analysis. The results of the
cost risk analysis are being briefed to CFM leadership and an action plan is being
developed to implement the recommendations. Project managers are taking actions
on the project-specific-risks identified. The action plan for systemic risks is expected
to be complete in December 2012.
Question 2: I have been informed that we have asked for copies of the letters
of intent to exceed 10 percent of the authorized amount for Orlando, Las Vegas and
New Orleans that are referenced in the FY 2013 budget submission. It is my understanding that the budget submission reflects that VA has sent these letters to the
Committees in November 2011. Please provide these letters to the Committee.
VA Response: Footnote 1 on page 647 of Volume 4 of the FY 2013 Budget Note
Submission (Attachment B) states: Authorization extended under P.L. 109461.
Notification letter sent to the Committees in November 2011 of intent to exceed 10
percent of the authorized amount (Attachment C). The second sentence of the footnote only applied to Syracuse, NY, and not the other projects associated with footnote 1. Adding the second sentence to Footnote 1 was in error. A separate footnote
regarding the notification letter should have been created that applied only to Syracuse.
Question 3: In testimony, Brasfield and Gorrie state that the Senior Contracting
Officer refused to meet with them in August, 2011. Is this true? If it is true, what
would be the reasoning for refusing to meet with the contractors on a project that
is already behind and beset with problems?
VA Response: CFM has a strong history of partnering with its contractors and
encourages open communication between the contractors representatives and CFM
staff. Specifically regarding the timeframe in question, there was a written request
from Brasfield & Gorrie (B&G) dated September 13, 2011, to the senior contracting
officer requesting a meeting to discuss seven (7) project matters affecting the respective project teams. The senior contracting officer responded to B&G on September
15, 2011, and arranged a meeting in Orlando on September 20, 2011. VA and B&G
held a follow-up meeting on November 17, 2011, in VA Central Office. Further, Mr.
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Robert Neary, Acting Executive Director, Office of Construction and Facilities Management met with B&G on January 5, 2012. The contracting officer continues to
meet with B&G bi-weekly. Mr. Neary and Mr. Glenn Haggstrom, Principal Executive Director, Office of Acquisition, Logistics and Construction, have met with B&G
in a series of meetings since the beginning of 2012. VA continues to engage the
Committee and provide updates on a regular basis.
Question 4: What is the exact amount of appropriations VA has received for the
86 major construction projects you reference in your testimony?
VA Response: VA received $7.4 billion for these 86 projects.
Question 5: In the spirit of transparency, please provide the Committee a spread
sheet on the 86 major construction projects, authorizations for those projects, appropriations for those projects and any bid savings, carry over funding, or supplemental
funding that is being applied to those projects.
VA Response: See spreadsheet on the 86 projects (Attachment D). This information can also be found in Volume 4 of 4 of VAs 2013 Budget Submission. Appropriations are summarized in Appendix F History of VHA Projects (pages 1058
to 1061) and Appendix G History of Non-VHA Projects (pages 10102 to 10105).
The Status Report for Authorized Major Medical Facility Projects is summarized on
page 645.
Question 6: As an agency, do you believe the lease process is one that is advantageous to assist in fulfilling your mission? If you could change the lease program,
what would it look like?
VA Response: The leasing program is a valuable tool that allows VA to effectively manage its capital assets while adapting to changing needs of our ultimate
customer the Veteran. Leasing allows VA flexibility in response to changing needs
within the Veteran population. VA can adapt to growing demands for services more
rapidly without the significant capital investment and time involved in the major
construction process. Leasing also allows VA to right-size facilities on a periodic
basis to address changes in health care delivery. Leasing ensures VA does not have
the fiscal responsibility for an aging asset. Leasing prevents VA from adding permanent assets to the portfolio. Permanent assets may become a burden to maintain
and operate in the future and are difficult to dispose of once they are no longer
needed. This allows VA greater flexibility to meet the needs of the ever-changing
Veteran population.
Currently, VA only has authority to lease for medical space, as defined in 38 USC
Section 8101. The Department continues to seek ways to improve the leasing process. On April 2012, the Secretary of Veterans Affairs established the Construction
Review Council (CRC) to periodically review the Departments development and execution of its real property capital asset programs. The CRC gives VA an opportunity
to anticipate possible issues and create solutions without hindering a project.
The CRC identified four areas of VAs construction program in which VA would
pursue improvements in order to allow for facilities to be delivered on time and
within scope. These four areas - Requirements, Design Quality, Funding, and Program Management- have been analyzed by the CRC in relation to the leasing program, and have resulted in the following changes.
Regarding requirements definition, additional agency-wide emphasis is being
placed on the requirements planning process in the very preliminary planning
stages. VA is committed to close consideration of baseline cost and size estimates
for leased facilities within the FY13 and FY14 budgets, as well as future budget
years, in order to correctly reflect the requirement to meet the need of the current
Veteran population.
For design quality, VA has implemented a pilot program in which CFMs planning
office engages the A/E firm performing VAs schematic design, to ensure that VA
is receiving a high quality of service by its A/E firms, and that VAs requirements
are interpreted correctly into the very early stages of the procurement process.
Regarding funding coordination, CFM is taking steps to have the funds required
for initial due diligence funding to be held in a centralized location, to mitigate potential delays in receipt of required due diligence items within the procurement
process.
Finally, for Program Management, CFMs Leasing Project Managers are now required to be FACP/PM level III certified. Currently, almost 75% of RPS project
managers have completed all required courses for FACP/PM certification, with the
remaining project managers currently participating in the training.
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Question 7: With regard to Orlando, please explain to me what happened between the hearing in April 2009 and the beginning of the problem in the spring of
2011. What problems and lack of communication contributed to the delay? What is
being done now to make sure this does not happen again?
VA Response: During the period, VA completed two phases of the project the
site utilities and infrastructure, and the foundations and superstructure of the main
hospital. VA also made significant progress with the central energy plant, community living center and domiciliary, and the warehouse and parking garages. The
main hospital build out package was awarded to B&G, the prime contractor, in August 2010 and a notice to proceed was given in October of that same year. The electrical design issues discovered post award were just being resolved in April of 2011,
and the timeliness of information regarding equipment procurement started to
emerge shortly thereafter. Additionally, during that same period, the prime contractor was confronted with quality control problems as significant deficiencies were
discovered with the roofing and interstitial steel. The converging challenges with
contractor performance contributed greatly to the delay. The Government rectified
the design and owner-furnished equipment problems. The prime contractor has yet
to provide adequate manpower for the trades on site. The prime contractor has also
failed to continue diligent prosecution of the work while awaiting resolution of potentially disputed issues.
VAs architect-engineer joint venture team and construction management firm
have provided additional staff to expedite any possible future design revisions and
to analyze time and money impacts of change orders. They are on site and easily
accessible, monitoring the ongoing activity daily. There are several meetings held
each week for the sole purpose of removing impediments to progress. VA has gone
to great lengths to respond to B&Gs requests for information and to facilitate recovery. Additionally, senior leadership, from both VA and B&G meet regularly.
Our mission is to serve Veterans, which includes delivering first-rate facilities on
time. VA bears the responsibility to manage all projects efficiently, meet deadlines,
and be good stewards of the resources entrusted to us by Congress and the American people. VA is committed to completing the Orlando VA Medical Center as soon
as possible and is working collaboratively with the prime contractor to get construction completed as soon as practicable.
Questions 8 & 9: I was concerned with the lack of communication when it was
determined the Orlando VA Medical Center was going to be delayed. The VA Central Office did not notify me or my staff of this development. My district staff was
notified by a public relations staff member who then asked up here if that was the
case. My concern is that VA Central Office did not have sufficient oversight of the
Orlando project and if they had, the delays and lack of communication could have
been avoided. What are your thoughts regarding communication between the Central Office and regional efforts considering what we have discussed here today?
VA Response: CFM has regular communications with the regional offices. CFM
VACO senior staff have routine weekly interaction with the Resident Engineer staff
on site to ensure communication continues to improve and issues are resolved as
quickly as possible. Field staff did discuss the delays with senior staff in VACO
which resulted in many actions including: management concurrence in proposal
postponement; review and approval of modifications; and strategic decisions on suspension of work. We believe the foundation for effective communications is in place
and it will continue to be exercised.
Question 10: You know Fort Bliss is growing by tens of thousands of troops, and
soldiers are leaving military service and more and more they will be staying El
Paso. Our local veteran population is growing and will probably increase at a much
faster rate than anywhere else in the country in the coming years. The Army is constructing a new medical center to replace the existing facility which is currently a
joint DoDVA facility. The VA will need to make a decision about how to deal with
this increased veteran population and with the need to expand their existing facility
or move to a new location. I believe that the best location for a new VA hospital
in El Paso is co-located with the Texas Tech Medical School on the campus of the
Medical Center of the Americas. This would give the VA access to top notch research and clinic assets - proving cutting edge care to veterans by partnering with
the medical school and others. How is the VA planning for new facilities in areas
like El Paso that are seeing major growth?
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any additional influx from the William Beaumont Army Medical Center (WBAMC)
at Ft. Bliss activities as outlined below:
Underway/Potential Projects:
A 27,000 gross square foot (GSF) clinical building on El Paso VA Health Care
System (EPVAHCS) grounds is currently under design for the expansion of dental, prosthetics/orthotics, and administration services. Construction is anticipated in FY 2013.
The Las Cruces CBOC leased space is scheduled to be expanded in FY 2014
from its current size of 5,000 net usable square feet (NUSF) to 9,000 NUSF.
Additional services are being finalized with a projected completion date of a new
lease in 2014.
Joint Incentive Fund with WBAMC endoscopy expansion is currently under construction. Activation is anticipated to be October 2012.
New Primary Care Telehealth Outpatient Clinic lease has been submitted for
approval in the FY 2014 Strategic Capital Investment Process to address rural
areas; anticipated location is Marfa, TX (approximately 194 miles from El Paso,
TX).
Contracts are being developed with community hospitals to provide overflow for
inpatient and outpatient needs. Contract development began the week of April
4, 2011. Statements of Work have been developed and are in the process of
being sent to Contracting for further processing.
Attachment A
Department of
Memorandum
Veterans Affairs
Date MAR 3 0 2012
From: Acting Executive Director, Office of Construction & Facilities Management
(003C)
Subj: Requirement for Integrated Master Schedules and Cost Risk Analysis
To:Regional Directors and Project Managers
1. The GAO issued a report in December 2009 recommending that VA implement
integrated master schedules and conduct a cost risk analysis for each major construction project. VA accepted these recommendations.
2. In addition, VA initiated project management training for VA Project Managers. This training addresses the need and methods for developing integrated master schedules and conducting cost risk analysis. Over 50 percent of CFMs assigned
Project Managers have achieved certification in this training.
3. VAFM has been studying the issue of adding risk management and integrated
schedules to the standard process for the last 2 years. The Project Management
Plan included chapters for risk management and schedules. In light of these actions
Integrated Master Schedules shall be created for all projects that obtained initial
funding in Fiscal Years (FY) 11 or FY 12. These schedules will contain planning activities and milestones for procurement, design, construction, medical equipment
procurement, and activation. The schedules shall be completed by the Project Manager and submitted to the Office of Programs and Plans (003C6) not later than June
29, 2012. Specific implementation instructions will be issued by (003C6) within 10
days of this directive
4. Integrated Master Schedules shall be created for all projects that obtained initial funding in FY 11 or 12. These schedules will contain planning activities and
milestones for procurement, design, construction, medical equipment procurement,
and activation. Projects that obtained initial funding prior to FY 11 will have a
truncated integrated master schedule developed based on the stage of the project.
All projects with at least 75 percent of all construction complete are exempt from
this requirement. For projects with less than 75 percent of all construction complete,
the schedules will be created by the Project Manager. The Integrated Master Schedules will be completed by Project Managers and submitted to (003C6) not later than
June 29, 2012. Specific implementation instructions will be issued by (003C6) within
10 days.
5. Project cost risk analysis will be conducted for all projects in the FY 12 and
FY 13 budgets. The analysis will be conducted by Cost Estimating Service. However,
I expect each Project Manager to work with the Cost Estimating Service to obtain
the completed analysis not later than June 1, 2012. Project Managers will submit
the cost risk analysis to (003C6) for review by June 1, 2012. Specific implementation
instructions will be issued by (003C6) within 10 days.
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6. Control of our construction projects is extremely important. These tools, while
allowing leadership a view into the development of the project, are designed to assist you in managing your work activities. I strongly encourage each of you to use
these tools to help us to more quickly deliver a quality product that serves the Departments needs and provides quality services to our Veterans.
Robert L. Neary, Jr.
Attachment B
Location
Description
Authorization
Approp.
Available
Through
FY 2012
FY(s)
Authorized
Status
Syracuse, NY 1
77,700
92,469
2007
CO
Tampa, FL 3
Polytrauma
Expansion & Bed
Tower Upgrade
231,500
231,500
2008
CO
Walla Walla, WA
Multi-Specialty
Care
71,400
71,400
2010
CO
Seismic
Corrections of 12
Buildings
35,500
35,500
2012
CD
1 Authorization extended under P.L. 109461. Notification letter sent to the Committees in November 2011 of intent to exceed 10 percent of the authorized amount.
2 Orlando, FL project was authorized for $656,800,000; available funding is $665,400,000 and is within the 10% allowance per Title 38, Section 8104.
3 Included under P.L. 110252 in 2008.
4 Long Beach, CA project was authorized for $117,845,000; available funding is $129,545,000, and is within the 10% allowance per Title 38, Section 8104.
5 San Antonio, TX Ward Upgrades and Expansion project was authorized for $19,100,000; available funding is
$20,994,000 and is within the 10% allowance per Title 38, Section 8104.
1999 projects were authorized in P.L. 105368. 2002 projects were authorized in
P.L. 107135. 2004 and 2005 projects were authorized under P.L. 108170, which
expired September 30, 2006. Projects authorized in P.L. 108170 that did not have
construction awards prior to the expiration date required reauthorization. 2004 and
2005 projects with expired authorization were reauthorized in P.L. 109461, as well
as the 2006 and 2007 projects. Atlanta, GA was authorized in P.L. 110168. The
2009 projects were authorized in P.L. 110387. Walla Walla, WA, was authorized
by P.L. 11198 in 2010. All other 2010 projects were authorized in P.L. 111163.
2011 projects were authorized in P.L. 111275. 2012 projects were authorized in
P.L. 11237.
Attachment C
THE SECRETARY OF VETERANS AFFAIRS
WASHINGTON
November 14, 2011
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project amount of $77.7 million for Phase II of the Spinal Cord Injury/Disease (SCl/
D) Center project at the VA Medical Center in Syracuse, New York. The current
total funding to date for the project is $85.4 million. Additional funds in the amount
of $5 million needed to complete this project will be provided from the Major Construction Working Reserve.
The SCl/D project includes a new supply processing and distribution (SPD) department to support seven new operating rooms. The original plans for the SPD
used 2008 criteria. A newly revised SPD design criterion was issued in 2010 and
included many significant changes. SPD provides for the sterilization of medical instrumentation and other products utilized in surgery. It is critical that the latest
criteria for SPD be available to ensure patient safety. An estimated $2 million will
be needed to support design and construction costs to complete the modified SPD.
Phase II, the Addition for SCl/D Center, is 75 percent complete. While the new
construction associated with the project is nearly complete, there is a significant
renovation phase to follow and insufficient contingency funds remain on hand to
cover unanticipated modifications that may be required during the renovation
phase. Historically, renovation has a higher risk of unforeseen changes than new
construction. The additional funds will permit completion of the renovation work in
accordance with the original requirements. An additional $2 million is needed for
construction contingency. An estimated $1 million will be utilized to contract for
necessary construction management service support.
This notification has been sent to the appropriate leadership of the House and
Senate Committees on Appropriations.
Sincerely,
Eric K. Shinseki
[THIS LETTER WAS ALSO SENT FROM ERIC K. SHINSEKI TO THE FOLLOWING INDIVIDUALS:]
The Honorable John Culberson
Chairman
Subcommittee on Military Construction,
Veterans Affairs, and Related Agencies
Committee on Appropriations
U.S. House of Representatives
Washington, DC 20515
The Honorable Mark Kirk
Ranking Member
Subcommittee on Military Construction,
Veterans Affairs, and Related Agencies
Committee on Appropriations
United States Senate
Washington, DC 20510
The Honorable Sanford D. Bishop, Jr.
Ranking Member
Subcommittee on Military Construction,
Veterans Affairs, and Related Agencies
Committee on Appropriations
U.S. House of Representatives
Washington, DC 20515
Attachment D
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72
Total
Appropriated
Location
State
WA
WA
AK
GA
Status
D""rip'ion
V;EiA,~RO ~t:tS
"' ii',""',:, 'ii'
Seismic Corrections-NHCU & Dietetics
Seismic Corrections of Bldg. 81
Outpatient Clinic
Modernize Patient Wards (OV)
TEC
38,220
NfA
75,270
20,534
38,220
5,260
75,265
24.~34
20,534
131,800
194,400
87,800
158,200
6,49E
CO
CO
89,800
158,200
Biloxi
MS
CO
304,000
Biloxi
Brockton
Bronx
Canandaigua
Chicago
Cleveland
Columbia
Columbus
Dallas
Dallas
Denver
Des Moines
Durham
PC
35,919
188,000
225,900
370,100
98,499
102,300
25,830
Fayetteville
AR
MS
MA
NY
NY
FL
FY05 Actua
38,220
52,600
75,265
24,534
-"'-
fY04Actuai
PC
CO
PC
00
FL
FL
Gainesville
Funds
'",iii:,
Bay Pines
Bay Pines
.Indian~'p?~s~~~_~~
Authorization
00
CD
S/DD
PC
PC
CO
PC
00
CD
CO
PC
PC
310,000
Hurricane
supplemental
NfA
NfA
NfA
98,500
102,300
25,830
94,800
15,640
in 2013 request
800,000
25,000
9,100
-~ r'
155,200
800,000
25,550
9,100
11,755
304,000
35,919
24,040
8,179
36,580
98,499
102,300
25,830
94,689
15,640
8,900
800,000
25,550
9,100
98,499
15,000
94,689
30,000
24,80C
9,100
Clinical Addition
co
90,600
90,600
88,100
PC
PC
114,200
27,400
136,700
27,400
101,575
27,400
8,800
27,400
~.,&
------~~-----.---.
Las Vegas
NV
CO
584,655
600,400
584,655
60,000
Long Beach
Long Beach
Louisville
Menlo Park
CA
CA
KY
CA
CO
00
129,545
258,400
1,100,000
32,934
117,845
NA
75,000
33,200
129,545
24,200
75,000
32,934
10,300
MP
PC
32,93t1
73
I FY06 Actual
FY07 Actual
FY08 Actual
FY09 Actual
FY10 Actual
FYll Actual
FY12 Actual
Comments
38,220
5,260
63,510
4,000
4,000
9,890
111,412 '
(42,000)
17,430
96,800
Lee County, FL, $42 million were transferred to the Filipino Veterans Compensation
Fund in 2010 per P.L. 111-212. Per the FY 2012 budget, $2 miilion were made
available to support other VA major project initiatives. Excess funds from unsued
(2,000) contingencies, impact items, etc. were transferred to the working reserve.
43,970
Biloxi, MS, received $17.5 million in regular appropriations and another $292.5
million in emergency supplemental appropriation from P.L. 109-148 in 2006. $6
million was transferred to the Filipino Veterans Compensation Fund in 2010 per P.L.
111-212.
[6,000)
310,000
35,919
24,040
8,179
36,580
87,300
25,830
25,000
52,000
750
5,800
61,300
8,900
20,000
119,000
[2,400)
Additional funding was received in the 2008 Omnibus Appropriation, P.L. 110-161
for: Fayetteville, AR; Gainesville, FL; Orlando, FL; Palo Alto, CA Seismic Building 2;
and Pittsburgh, PA. Fayetteville, AR, $2.4 million were transferred to the Filipino
Veterans Compensation Fund in 2010 per P.L. 111-212 Per the FY 2012 budget, $2.5
million were made available to support other VA major project initiatives. Excess
funds from unused contingencies, impact items, etc. were transferred to the
(2,500) working reserve.
[14,800)
Additional funding was received in the 2008 Omnibus Appropriation, P.L. 110-161
for: Fayetteville, AR; Gainesville, FL; Orlando, FL; Palo Alto, CA. Seismic Building 2;
and Pittsburgh, PA, Gainesville, FL, $7.7 million were reprogrammed to Syracuse, NY
in 2009. $14.8 million were reprogrammed from this project in 2010: $11.7 million
to Long Beach, CA Seismic Buildings 7 & 126 and $3.1 million to the San Juan, PR
Seismic Corrections project from 1999, which is not represented on this History
table. Per the FY 2012 budget, $12.6 million were made available to support other
VA major project initiatives. Excess funds from unsued contingencies, impact items,
(12,625) etc. were transferred to the working reserve.
[6,900)
Las Vegas, NV $6.9 million were transferred to the Filipino Veterans Compensation
Fund in 2010 per P.L.111-212. Perthe FY 2012 budget, $8.8 million were made
available to support other VA major project initiatives. Excess funds from unsued
(8,845) contingencies, impact items, etc. were transferred to the working reserve.
I
51,500
199,000
[7,700)
341,400
97,545
42,000
Des Moines, lA, received $750,000 in a reprogramming action in 2007.
87,200
76,400
450,700
10,000 I
75,000
11,700
24,200
Long Beach, CA, in 2010 $11.7 million in bid savings were reprogrammed from
Gainesville, FL.
74
Total
Appropriated
Location
State
Description
Status
TEC
Authorization
Funds
Milwaukee
Minneapolis
WI
MN
PC
PC
29,500
20,438
32,500
20,500
27,581
20,438
New Orleans
Omaha
LA
NE
CO
DO
995,000
560,000
995,000
N/A
995,000
56,000
Orlando
FL
CO
---~
656,800
616,158
Palo Alto
Palo Alto
CA
CA
CO
5/00
54,000
354,300
54,000
55,430
54,000
55,430
Palo Alto
Pensacola
Perry Point
CA
FL
MD
716,600
55,056
90,100
716,600
55,500
N/A
294,777
55,056
9,000
Pittsburgh
Reno
PA
NV
295,594
213,800
295,600
N/A
282,594
21,380
Sacramento
Saint Louis
208,600
443,400
N/A
43,340
17,332
43,340
San Antonio
TX
PC
20,994
19,100
20,994
San Antonio
San Diego
San Diego
San Francisco
San Francisco
San Juan
Seattle
Seattle
St. Louis (J8D)
TX
CA
CA
CA
CA
PR
WA
WA
MO
CO
PC
DO
PC
AE
CO
CD
CD
CO
66.000
47,874
195,000
41,168
224,800
277,000
51,800
222,000
366,500
66,000
48,260
N/A
41,500
N/A
277,000
51,800
in 2013 request
346,300
66,000
47,874
18,340
41,168
22,480
277,000
51,800
17,870
111,700
FY04 Actual
FY05 Actua
20,500
I
i
34,000 I
25,000
CO
AE
55.05
19,994
19,094
47,874
41,16E
14,88C
75
I FY06 Actual
FY07 Actual
FY08 Actual
FY09 Actual
FY10 Actual
FYll Actual
Comments
(3,000)
32,500
FY12 Actual
_ _~---+---T_---+--~16=2,)t---+--~---------------------~
625,000
310,000
56,000
49,100
220,000
Additional funding was received in the 2008 Omnibus Appropriation, P.L. 110-161
for: Fayetteville, AR; Gainesville, FL; Orlando, FL; Palo Alto, CA Seismic Building 2;
and Pittsburgh, PA.
55,430
164,877
Additional funding was received in the 2008 Omnibus Appropriation, P.L. 110-161
for: Fayetteville, AR; Gainesville, FL; Orlando, FL; Palo Alto, CA Seismic Building 2;
and Pittsburgh, PA. 6 Per the FY 2012 budget, funds were made available to support
other VA major project initiatives. Funds were transferred to the working reserve
from projects nearing completion with unused contingencies, impact items, etc. In
2012, Orlando transferred $49.2 million, Pittsburgh transferred $13 million, and
(49,242) Tampa transferred $2.7 million.
371,300
20,000
New Orleans, LA, was funded through two emergency supplemental appropriations:
60,000 $75 million from P.l. 109-148 and another $550 million from P.l. 109-234.
54,000
Palo Alto, CA, Ambulatory Care/Polytrauma Rehab and Tampa, FL, Poly trauma/Bed
75,900 Tower projects received funding in the 2008 emergency supplemental, P.L. 110-252.
9,000
82,500
130,700
62,400
-------.----+----+--""43'-,-,34''''0+---'''''7,'''3'''32+-----+'f'''0,-,-o";'"he",=ov"e","",f",mc.m"th"e",C=o"m",pe",o",""t;",oo-,,',,,o,,-d'-.Pe"o"";"'oo"'''-'p'''p'''m"p'''ria'''t''';o,,o,_____ _
San Antonio, TX, Ward Upgrades and Expansions received $1.9 million, in a
reprogramming action in 2009.
1,900
San Antonio, TX, Polytrauma Center received $66 million in reprogramming action in
2008. The project was required by P.L. 110-161.
66,000
18,340
14,000)
59,000
7,000
64,400
4,300
17,870
5,000
42,000
22,480
100,720
47,500
19,700
80,000
76
Total
Location
Description
State
Status
TEC
Authorization
Appropriated
Funds
Syracuse
NY
CO
87,469
77,700
92,469
Tampa
FL
PC
49,000
49,000
46,259
Tampa
FL
CO
231,500
231,500
231,500
CO
CO
10,552
56,000
10,552
71,400
71,400
71,400
346,900
35,500
1,027,900
NfA
TX IT Building
WA Multi Specialty Care (Overview)
Temple
Walla Walla
~ngeles (BRNT)
CA
CA
CD
MP
FY04 Actual
fYOS Actua
53,465
49,000
55,55
35,500
50.790
6,803,696
I,;''',;
: ',';,"
:'
;1'I,~4P~"'~CTS
':'
""
PA
CA
FL
CO
PC
PC
Bayamon
PR
Birmingham
Bourne
Annville
Bakersfield
Barrancas National Cemetery
Bushnell
FL
r9lverton
NY
SC
TX
MI
Columbia/Greenville
Dallas
~!roit ____
NCA
NCA
NCA
23,500
19,500
11,929
CO
33,900
NCA
23,900
PC
CO
14,445
20,500
NCA
NCA
20,500
PC
19,840
NCA
20,504
21,34
~20
60C
t - - - -j- - -
PC
~~
CO
PC
PC
16,196
39,300
18,400
- -- -
--
Gravesite Development
Honolulu
IL
TX
HI
CO
CO
DD
Houston
TX
jacksonville
Kent
Los Angeles
Minneapolis
Elwood
Ft. Sam Houston
23,500
16,232
13,000
13,566
NCA
c------NCA
NCA
NCA
12,429
17,343
14,880
f-----+__
13,000
__~}2.6
25,471
29,400
23,700
NCA
NCA
NCA
CO
35,000
NCA
19,749
PC
AA
CD
16,166
25,800
NCA
NCA
NCA
16,138
25,800
27,600
MN
PC
24,659
NCA
24,654
Gravesite Expansion
11;929,
f----j--
23,700
27,600
24,654
77
I FY06 Actual
FY07 Actual
FYOB Actual
FY09 Actual
FYiO Actual
I
I FYll Actual
FYl2 Actual
Comments
Syracuse, NY, received $7.7 million in a reprogramming <lction in 2009 from the
Gainesville, FL project. In 2010, $2 million were reprogrammed from the Major
Working Reserve. In 2011, $500 thousand were transferred from the working
23,800
7,700
2,000
500
reserve account. In 2013, $5 million were reprogrammed from the working reserve
5,000 account,
Per the FY 2012 budget, funds were made available to support other VA major
project initiatives. Funds were transferred to the working reserve from projects
nearing completion with unused contingencies, impact items, etc. In 2012, Orlando
transferred $49.2 million, Pittsburgh transferred $13 million, and Tampa transferred
(2,741) $2.7 million.
Palo Alto, CA, Ambulatory Care/Poly trauma Rehab and Tampa, Fl, Poiytrauma/Bed
231,500
Tower projects received funding in the 2008 emergency supplemental, P.L. 110-252.
Temple, TX, received $56 million in 2005. In 2008 a planning decision about the
future of the Waco, TX, facility diminished the need for major construction activities
at Temple and $45 million was reprogrammed from the project. The remaining
$10.55 million will construct an IT facility.
(45,000)
71,400
West Los Angeles, CA Seismic Retrofit of 12 Buildings, $20 million were made
available in 2012 from prior year funds in order to complete the renovations of
15,500
23,500
19,500
500
33,900
18,500
20,500
Per the FY2012 budget, $0.8M was made available for other uses in support of the
(836) major construction program.
Per the FY2012 budget, $l.3M was made available for other uses in support of the
I
,---1---"---- - - -' - -' - - - - '-
+ ____+-_,__f-_, __9,35
29,000
19,200
__ ~ ___ _
13,000
--
Per the FY2012 budget, $13.8M was made available for other uses in support of the
1,000
38,300
29,400
23,700
Per the FY2012 budget, $15.3rv1 was made available for other uses in support of the
(15,251) major construction program.
35,000
22,400
Per the FY2012 budget, $2.1M was made available for other uses in support of the
(2,081) major construction program.
(4,181)
25,800
27,600
78
Total
Appropriated
Location
TEC
State
Description
Status
PA
IL
CO
23,636
FC
10,118
NCA
NCA
26,300
Rock Island
10,118
10,11
Sacramento
CA
PC
21,727
NCA
21,727
21,42
Philadelphia
Authorization
Funds
San Diego
CA
CO
26,450
NCA
25,937
Sarasota
FL
co
27,800
Schuylerville
NY
PC
6,340
NCA
NCA
23,195
13,991
522,122
Martinsburg
WV
PC
33,700
STAFF OFFICE
35,000
FC
13,000
VA/DOD sharing
North Chicago
IL
11,781
7,372,599
Note: NCA, Staff Office and VA/DoD sharing major construction projects do not require authorization.
FV04Actuai
FV05 Actua
13,991
13,000
79
I FY06 Actual
FY07 Actual
FYOB Actual
FY09 Actual
FY10 Actual
FYll Actual
FY12 Actual
Comments
Per the FY2012 budget, $3.3M was made available for other uses in support of the
(3,300) major construction program.
29,600
(7,000)
7,300
19,450
7,000
27,800
35,000
(1,219)
North Chicago, IL, in 2009 $1.219 million was transferred to the Major Working
Reserve.